Mechanism design for public goods, exclusive private goods and subcontracting

Economic interactions such as selling an item for profit or scheduling the time of a subcontractor for cost savings can be formulated as a game. For such games this thesis studies and constructs mechanisms (set of rules) that coordinate the involved individuals to a good outcome despite the fact that they act in their own self-interest. These mechanisms are outputs of optimization models in which a good outcome can mean that the profit or the time saving is the highest possible. We consider also mechanisms that exhibit other useful properties such as simple and intuitive rules or easy implementation for a small sacrifice in profit.

This research was funded by GSBE.