Abstract

The purpose of this paper is to present a mechanism the Nash allocations of which coincide with the Lindahl allocations even when preferences are nontransitive or nontotal. This extension to include nontotal–nontransitive preferences is potentially very important since preferences of agents are nontransitive–nontotal in many cases — in particular in the case where the players are groups of individuals. Besides, the mechanism presented here uses outcome functions that are individually feasible, balanced (not merely weakly balanced), continuous, differentiable around Nash equilibria and, furthermore, almost everywhere differentiable. Moreover, the mechanism has a message space of minimal dimension.

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