Nota di lavoro, Fondazione Eni Enrico Mattei: Climate Change and Sustainable Development 41.2012
We put forward a model of private goods with externalities. Agents derive benefit from communicating with each other. In order to communicate they need to have a language in common. Learning languages is costly. In this setting no individually rational and feasible Groves mechanism exists. We characterize the best-in-class feasible Groves mechanism and the best-in-class individually rational Groves mechanism.
Groves Mechanisms Externality Budget Surplus or Deficit Pareto Undominated