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The Optimal Supply Of Congested Public Goods

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  • Tchai Tavor
  • Uriel Spiegel

Abstract

Impure public goods resulting from the congestion effect are discussed in the literature solely for the case of homogenous populations where consumers have identical demands. We extend this to include heterogeneous populations, where demands are rectangularly distributed. We compare the optimal values of the control variables (quantity of the public good and the number of users) for both homogeneous and heterogeneous populations, as well as the social optimum values for both cases.

Suggested Citation

  • Tchai Tavor & Uriel Spiegel, 2014. "The Optimal Supply Of Congested Public Goods," Economy & Business Journal, International Scientific Publications, Bulgaria, vol. 8(1), pages 977-984.
    • Handle: RePEc:isp:journl:v:8:y:2014:i:1:p:977-984
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    References listed on IDEAS

    as
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    3. Todd Sandler, 1977. "Impurity Of Defense: An Application To The Economics Of Alliances," Kyklos, Wiley Blackwell, vol. 30(3), pages 443-460, August.
    4. Birulin, Oleksii, 2006. "Public goods with congestion," Journal of Economic Theory, Elsevier, vol. 129(1), pages 289-299, July.
    5. repec:bla:kyklos:v:30:y:1977:i:3:p:443-60 is not listed on IDEAS
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    More about this item

    Keywords

    congested public good; lindhal; rectangulary distributed demand; homogeneous and heterogeneous customers;
    All these keywords.

    JEL classification:

    • A - General Economics and Teaching

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