We assume that each region has a different waste disposal cost; the costs are known privately and drawn independently from different probability distributions. We don't know the true cost of each region. We know the cost distributions. We also assume that each region has a different population rate.
Based on these assumptions, we characterize the set of all incentive-compatible, interim-individual-rational and ex post budget-balanced siting mechanisms, and give a necessary and sufficient condition for such mechanisms to site the waste dump ex post efficiently. We also propose complex but incentive-compatible, interim-individual-rational and ex post budget-balanced siting mechanisms.
We relax the budget-balance constraint. As a result, we derive that one of incentive-compatible, interim-individual-rational mechanisms is a second-price auction. We see how the siting mechanisms change under the assumption that willingness-to-pay and willingness-to-accept are different.