Effective siting of waste treatment facilities

A waste treatment plant or another essential but potentially unpleasant facility has to be built in one of n communities. We present a simple auction-like procedure that identifies the best location and determines a system of transfers that provide the host community with adequate compensation. The siting procedure is simple and effective and can be readily applied in real world situations. In addition, it is ex post budget balanced, ex post individually rational, and robust, and it induces bidding the true disutility (or close to it) as a focal strategy in many different environments. (C) 2001 Elsevier Science (USA).