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Pareto optimal provisions as outcomes of voluntary public good supply

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  • Buchholz, Wolfgang
  • Kleinberg, Norman
  • Ma, Barry

Abstract

It is shown that a large set of public good supply levels that arise in a Pareto optimal allocation can also be attained as public good provisions in the Nash equilibrium of a non-cooperative provision game. With a not very far-fetched assumption on agents’ preferences this result even holds for all Pareto supply levels.

Suggested Citation

  • Buchholz, Wolfgang & Kleinberg, Norman & Ma, Barry, 2024. "Pareto optimal provisions as outcomes of voluntary public good supply," Economics Letters, Elsevier, vol. 243(C).
    • Handle: RePEc:eee:ecolet:v:243:y:2024:i:c:s0165176524003975
    DOI: 10.1016/j.econlet.2024.111913
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    References listed on IDEAS

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    1. Chen, Cuicui & Zeckhauser, Richard, 2018. "Collective action in an asymmetric world," Journal of Public Economics, Elsevier, vol. 158(C), pages 103-112.
    2. Warr, Peter G., 1983. "The private provision of a public good is independent of the distribution of income," Economics Letters, Elsevier, vol. 13(2-3), pages 207-211.
    3. Wolfgang Buchholz & Wolfgang Peters, 2001. "The overprovision anomaly of private public good supply," Journal of Economics, Springer, vol. 74(1), pages 63-78, February.
    4. Cornes,Richard & Sandler,Todd, 1996. "The Theory of Externalities, Public Goods, and Club Goods," Cambridge Books, Cambridge University Press, number 9780521477185, January.
    5. Bergstrom, Theodore & Blume, Lawrence & Varian, Hal, 1986. "On the private provision of public goods," Journal of Public Economics, Elsevier, vol. 29(1), pages 25-49, February.
    6. Wolfgang Buchholz & Todd Sandler, 2021. "Global Public Goods: A Survey," Journal of Economic Literature, American Economic Association, vol. 59(2), pages 488-545, June.
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    More about this item

    Keywords

    Public goods; Pareto optimal solutions; Samuelson condition; Nash equilibria;
    All these keywords.

    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • H00 - Public Economics - - General - - - General
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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