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Informative Voting and the Samuelson Rule

Author

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  • Felix Bierbrauer

    (Max Planck Institute for Research on Collective Goods, Bonn)

  • Marco Sahm

    (Lehrstuhl fuer Finanzwissenschaft, Munich, Germany.)

Abstract

We study the classical free-rider problem in public goods provision in a large economy with uncertainty about the average valuation of the public good. Individual preferences over public goods are shaped by a skill and a taste parameter. We use a mechanism design approach to solve for the optimal utilitarian provision rule. The relevant incentive constraints for information aggregation ensure that individuals be-have as if they were engaging in informative voting over the level of public good provision. It is shown that the use of information by an optimal provision rule is inversely related to the polarization of preferences which results from the properties of the skill distribution.

Suggested Citation

  • Felix Bierbrauer & Marco Sahm, 2006. "Informative Voting and the Samuelson Rule," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2006_18, Max Planck Institute for Research on Collective Goods.
    • Handle: RePEc:mpg:wpaper:2006_18
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    References listed on IDEAS

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    Cited by:

    1. Felix Bierbrauer, 2006. "Collectively Incentive Compatible Tax Systems," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2006_24, Max Planck Institute for Research on Collective Goods.

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    More about this item

    Keywords

    information aggregation; informative voting; public goods; two-dimensional heterogeneity;
    All these keywords.

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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