Implementing a Lindahl Equilibrium with a Modified Tatonnement Mechanism: Some Preliminary Experimental Results

Abstract

"There has been considerable experimental work on private goods auction markets and on incentive-compatible public goods allocation mechanisms. But, with one exception, there has been no experimental work on classical tatonnement mechanisms of any kind. This is despite the fact that most theoretical work on markets assumes such a mechanism. This paper reports preliminary experimental results on implementing a tatonnement mechanism for allocating public goods. The experiments are conducted on the PLATO interactive computer system, which act s as both the auctioneer and the passive medium of information transfer and display. In addition, we discus s strategies and problems regarding the design and implementation of computerized versions of such mechanisms."