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The Edgeworth Conjecture in a Public Goods Economy: An Elementary Example

Author

Listed:
  • Wolfgang Buchholz

    (Department of Economics, University Regensburg)

  • Wolfgang Peters

    (European University Viadrina)

Abstract

We show by a simple example that in a public goods economy consisting of identical individuals with symmetric Cobb-Douglas preferences the core of the economy does not con-verge to the Lindahl solution when the number of agents goes to infinity. This confirms in an elementary way that the Edgeworth conjecture does not necessarily hold in an economy with a public good.

Suggested Citation

  • Wolfgang Buchholz & Wolfgang Peters, 2007. "The Edgeworth Conjecture in a Public Goods Economy: An Elementary Example," Economics Bulletin, AccessEcon, vol. 8(6), pages 1-4.
    • Handle: RePEc:ebl:ecbull:eb-07h40003
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    References listed on IDEAS

    as
    1. Ellickson, Bryan, 1978. "Public goods and joint supply," Journal of Public Economics, Elsevier, vol. 9(3), pages 373-382, June.
    2. Cornes,Richard & Sandler,Todd, 1996. "The Theory of Externalities, Public Goods, and Club Goods," Cambridge Books, Cambridge University Press, number 9780521477185, January.
    3. Weber, Shlomo & Wiesmeth, Hans, 1991. "The equivalence of core and cost share equilibria in an economy with a public good," Journal of Economic Theory, Elsevier, vol. 54(1), pages 180-197, June.
    4. Conley John P., 1994. "Convergence Theorems on the Core of a Public Goods Economy: Sufficient Conditions," Journal of Economic Theory, Elsevier, vol. 62(1), pages 161-185, February.
    5. Milleron, Jean-Claude, 1972. "Theory of value with public goods: A survey article," Journal of Economic Theory, Elsevier, vol. 5(3), pages 419-477, December.
    6. Moulin, Herve, 1987. "Egalitarian-Equivalent Cost Sharing of a Public Good," Econometrica, Econometric Society, vol. 55(4), pages 963-976, July.
    7. Foley, Duncan K, 1970. "Lindahl's Solution and the Core of an Economy with Public Goods," Econometrica, Econometric Society, vol. 38(1), pages 66-72, January.
    8. Muench, Thomas J., 1972. "The core and the Lindahl equilibrium of an economy with a public good: an example," Journal of Economic Theory, Elsevier, vol. 4(2), pages 241-255, April.
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    Citations

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    Cited by:

    1. Nizar Allouch, 2010. "A Core‐Equilibrium Convergence in a Public Goods Economy," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 12(4), pages 857-870, August.
    2. Marakulin, V.M., 2013. "On the Edgeworth conjecture for production economies with public goods: A contract-based approach," Journal of Mathematical Economics, Elsevier, vol. 49(3), pages 189-200.

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    More about this item

    Keywords

    core;

    JEL classification:

    • H4 - Public Economics - - Publicly Provided Goods

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