We consider collective choice problems where a set of agents have to choose an alternative from a finite set and agents may or may not become users of the chosen alternative. An allocation is a pair given by the chosen alternative and the set of its users. Agents have gregarious preferences over allocations: given an allocation, they prefer that the set of users becomes larger. We require that the final allocation be efficient and stable (no agent can be forced to be a user and no agent who wants to be a user can be excluded). We propose a two-stage sequential mechanism whose unique subgame perfect equilibrium outcome is an efficient and stable allocation which also satisfies a maximal participation property.
The work of Massó is partially supported by the Spanish Ministry of Education and Science through grant SEJ2005-01481/ECON and FEDER and through project CONSOLIDER-INGENIO 2010 (CDS2006-00016), and by the Generalitat de Catalunya through grant SGR2005-00454 and through the Barcelona
Economics Program (XREA). The work of Nicolò is partially supported by the Italian Ministry of University and Research through grant 2005137858.