A Generalization of the Clarke Mechanism to a Non-Quasi-Linear Utility Domain

Abstract

A mechanism taxes and finances a public good under the assumption that each agent has a classical concave utility function. In the large limit of the economy with respect to the population, this mechanism asymptotically satisfies dominant strategy implementability and budget balancedness, and thus asymptotically achieves Pareto efficiency. If each agent has a quasi-linear utility function, then this mechanism reduces to the standard Clarke mechanism, which is known to achieve Pareto efficiency asymptotically only when each agent has a quasi-linear utility function.