Strategyproof cost sharing of a binary good and the egalitarian solution

Abstract This paper provides two characterizations of a mechanism based on the Dutta-Ray egalitarian solution in the context of a model of provision of a binary good with submodular costs. Under the assumption that agents' valuations for the good are independent draws from a distribution function satisfying the monotone hazard rate condition, it is shown that the mechanism based on the egalitarian solution maximizes the probability that all members of any given coalition accept the cost shares imputed to them. If the distribution function is log-concave, then this mechanism also maximizes the expected surplus from any given coalition.