Temporal Scarcity in Mechanism Design: A Decentralized Approach to Public Goods Provision

Abstract

This paper addresses the fundamental challenge of public goods provision-the Samuelsonian Dilemma-by proposing a decentralized mechanism termed Citizen's Executive Right (CER). Unlike traditional central-planning models, the CER mechanism endows agents with dispositional authority over tax revenues via Personal Public Accounts (PPAs). We introduce Temporal Scarcity-enforced by a "Rule of Lapsing"-as an information-forcing operator that collapses strategic delay into discrete preference signals. Our theoretical contributions are threefold: 1. Incentive Compatibility: We prove that under loss aversion, the mechanism achieves a symmetric Perfect Bayesian Equilibrium that is "detail-free" (Wilson Doctrine). 2. The Extended Walras's Law: We derive an identity showing that the clearing of the public sphere, measured by the Total Lapsing Rate ($\Lambda_t$), is a sufficient condition for general equilibrium. 3. Dynamic Stability: Using the Routh-Hurwitz criteria, we demonstrate that the balanced equilibrium is locally asymptotically stable, where the temporal pressure acts as a feedback operator. Our results suggest that institutionalizing time-limited dispositional rights can resolve the structural void in public finance, providing a robust blueprint for market-based public governance.