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Inequality-averse principal, exogenous budget, and second-best public-goods provision

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  • Boyer, Pierre C.

Abstract

We characterize the second-best public-goods provision rule with an inequality-averse principal. Our main results show how the provision rule reacts to variations of an exogenous budget available for public-goods provision when the principal exhibits different levels of inequality aversion.

Suggested Citation

  • Boyer, Pierre C., 2015. "Inequality-averse principal, exogenous budget, and second-best public-goods provision," Economics Letters, Elsevier, vol. 127(C), pages 61-63.
    • Handle: RePEc:eee:ecolet:v:127:y:2015:i:c:p:61-63
    DOI: 10.1016/j.econlet.2014.12.037
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    References listed on IDEAS

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    1. Green, Jerry & Laffont, Jean-Jacques, 1977. "Characterization of Satisfactory Mechanisms for the Revelation of Preferences for Public Goods," Econometrica, Econometric Society, vol. 45(2), pages 427-438, March.
    2. Hellwig, Martin F., 2005. "A utilitarian approach to the provision and pricing of excludable public goods," Journal of Public Economics, Elsevier, vol. 89(11-12), pages 1981-2003, December.
    3. Green, Jerry & Laffont, Jean-Jacques, 1977. "On the revelation of preferences for public goods," Journal of Public Economics, Elsevier, vol. 8(1), pages 79-93, August.
    4. John O. Ledyard & Thomas R. Palfrey, 1999. "A Characterization of Interim Efficiency with Public Goods," Econometrica, Econometric Society, vol. 67(2), pages 435-448, March.
    5. Oecd, 2007. "Towards Better Measurement of Government," OECD Working Papers on Public Governance 1, OECD Publishing.
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    More about this item

    Keywords

    Public-goods provision; Comparative statics; Utilitarian welfare maximization;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • H61 - Public Economics - - National Budget, Deficit, and Debt - - - Budget; Budget Systems

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