IDEAS home Printed from https://ideas.repec.org/p/mlb/wpaper/962.html
   My bibliography  Save this paper

Public Good Menus and Feature Complementarity

Author

Listed:
  • Christian Roessler

Abstract

The distance metric on the location space for multidimensional public good varieties represents complementarity between the goods features. "Euclidean" feature complementarity has atypical strong properties that lead to a failure of intuition about the optimal-menu design problem. If the population is heterogeneous, increasing the distance between two varieties is welfare-improving in Euclidean space, but not generally. A basic optimal-direction principle always applies: "anticonvex" menu changes increase participation and surplus. A menu replacement is anticonvex if it moves the varieties apart in the common line space. The result extends to some impure public goods with break-even pricing and variety-specic costs. A sufficient condition for menus to be Pareto-optimal is that "personal price" (nominal price plus perceived distance from a variety) is linear in the norm that induces the distance metric.

Suggested Citation

  • Christian Roessler, 2006. "Public Good Menus and Feature Complementarity," Department of Economics - Working Papers Series 962, The University of Melbourne.
    • Handle: RePEc:mlb:wpaper:962
    as

    Download full text from publisher

    File URL: http://www.economics.unimelb.edu.au/downloads/wpapers-06/962.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Ehlers, Lars, 2003. "Multiple public goods, lexicographic preferences, and single-plateaued preference rules," Games and Economic Behavior, Elsevier, vol. 43(1), pages 1-27, April.
    2. M. Voorneveld & A. Nouweland & R. McLean, 2011. "Axiomatizations of the Euclidean compromise solution," International Journal of Game Theory, Springer;Game Theory Society, vol. 40(3), pages 427-448, August.
    3. Ehlers, Lars, 2002. "Multiple public goods and lexicographic preferences: replacement principle," Journal of Mathematical Economics, Elsevier, vol. 37(1), pages 1-15, February.
    4. Lerer, Ehud & Nitzan, Shmuel, 1985. "Some general results on the metric rationalization for social decision rules," Journal of Economic Theory, Elsevier, vol. 37(1), pages 191-201, October.
    5. Carlo Perroni & Kimberley A. Scharf, 2001. "Tiebout with Politics: Capital Tax Competition and Constitutional Choices," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 68(1), pages 133-154.
    6. Pal, Debashis & Sarkar, Jyotirmoy, 2002. "Spatial competition among multi-store firms," International Journal of Industrial Organization, Elsevier, vol. 20(2), pages 163-190, February.
    7. Ehlers, Lars, 2001. "Independence axioms for the provision of multiple public goods as options," Mathematical Social Sciences, Elsevier, vol. 41(2), pages 239-250, March.
    8. Toshihiro Matsumura, 2003. "Consumer‐benefiting exclusive territories," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 36(4), pages 1007-1025, November.
    9. Michael L. Katz, 1980. "Multiplant Monopoly in a Spatial Market," Bell Journal of Economics, The RAND Corporation, vol. 11(2), pages 519-535, Autumn.
    10. Eiichi Miyagawa, 2001. "Locating libraries on a street," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 18(3), pages 527-541.
    11. Andreas Pfingsten & Andreas Wagener, 2003. "Bargaining Solutions as Social Compromises," Theory and Decision, Springer, vol. 55(4), pages 359-389, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Masashi Umezawa, 2012. "The replacement principle for the provision of multiple public goods on tree networks," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 38(2), pages 211-235, February.
    2. Lars Ehlers, 2022. "Three public goods and lexicographic preferences: replacement principle," Review of Economic Design, Springer;Society for Economic Design, vol. 26(3), pages 367-384, September.
    3. repec:spo:wpmain:info:hdl:2441/4ccevsvsdm96qpv5fgamlf1p1p is not listed on IDEAS
    4. Ehlers, Lars, 2003. "Multiple public goods, lexicographic preferences, and single-plateaued preference rules," Games and Economic Behavior, Elsevier, vol. 43(1), pages 1-27, April.
    5. Bochet, Olivier & Gordon, Sidartha, 2012. "Priorities in the location of multiple public facilities," Games and Economic Behavior, Elsevier, vol. 74(1), pages 52-67.
    6. Aziz, Haris & Chan, Hau & Lee, Barton E. & Parkes, David C., 2020. "The capacity constrained facility location problem," Games and Economic Behavior, Elsevier, vol. 124(C), pages 478-490.
    7. Bettina Klaus & Panos Protopapas, 2020. "Solidarity for public goods under single-peaked preferences: characterizing target set correspondences," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 55(3), pages 405-430, October.
    8. Ju, Biung-Ghi, 2008. "Efficiency and consistency for locating multiple public facilities," Journal of Economic Theory, Elsevier, vol. 138(1), pages 165-183, January.
    9. Sidartha Gordon, 2015. "Unanimity in attribute-based preference domains," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 44(1), pages 13-29, January.
    10. Sidartha Gordon, 2014. "Unanimity in Attribute-Based Preference Domains," SciencePo Working papers Main hal-01061994, HAL.
    11. Bochet, Olivier & Gordon, Sidartha & Saran, Rene, 2013. "Weighted majoritarian rules for the location of multiple public facilities," Journal of Mathematical Economics, Elsevier, vol. 49(6), pages 454-459.
    12. repec:spo:wpecon:info:hdl:2441/4ccevsvsdm96qpv5fgamlf1p1p is not listed on IDEAS
    13. Sidartha Gordon, 2014. "Unanimity in Attribute-Based Preference Domains," SciencePo Working papers hal-01061994, HAL.
    14. Sidartha Gordon, 2007. "Solidarity in choosing a location on a cycle," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 29(1), pages 125-147, July.
    15. Eun Heo, 2013. "Strategy-proof rules for two public goods: double median rules," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 41(4), pages 895-922, October.
    16. repec:hal:wpspec:info:hdl:2441/4ccevsvsdm96qpv5fgamlf1p1p is not listed on IDEAS
    17. Gordon, Sidartha, 2007. "Public decisions: Solidarity and the status quo," Games and Economic Behavior, Elsevier, vol. 61(2), pages 225-241, November.
    18. repec:hal:spmain:info:hdl:2441/4ccevsvsdm96qpv5fgamlf1p1p is not listed on IDEAS
    19. Ehlers, Lars, 2002. "Multiple public goods and lexicographic preferences: replacement principle," Journal of Mathematical Economics, Elsevier, vol. 37(1), pages 1-15, February.
    20. Jacques Durieu & Hans Haller & Nicolas Querou & Philippe Solal, 2008. "Ordinal Games," International Game Theory Review (IGTR), World Scientific Publishing Co. Pte. Ltd., vol. 10(02), pages 177-194.
    21. Barberà, Salvador & Berga, Dolors & Moreno, Bernardo, 2012. "Two necessary conditions for strategy-proofness: On what domains are they also sufficient?," Games and Economic Behavior, Elsevier, vol. 75(2), pages 490-509.
    22. Edith Elkind & Piotr Faliszewski & Arkadii Slinko, 2015. "Distance rationalization of voting rules," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 45(2), pages 345-377, September.
    23. Haris Aziz & Alexander Lam & Barton E. Lee & Toby Walsh, 2021. "Strategyproof and Proportionally Fair Facility Location," Papers 2111.01566, arXiv.org, revised Nov 2023.
    24. Olivier Bochet & Sidartha Gordon & René Saran, 2013. "Weighted Majoritarian Rules for the Location of Multiple Public Facilities," SciencePo Working papers Main hal-03460749, HAL.

    More about this item

    Keywords

    Public Good Menus; complementarity;

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mlb:wpaper:962. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dandapani Lokanathan (email available below). General contact details of provider: https://edirc.repec.org/data/demelau.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.