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Efficient Allocations in Club Economies

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  • Marcus Berliant
  • John H. Y. Edwards

Abstract

We explore the characteristics of Pareto‐optimal allocations in the context of local public goods or clubs. A set of first‐order conditions for Pareto optimality is provided. Classical treatments apparently neglect an important term related to migrant compensation, and thus are incorrect. A Pareto optimum is shown to exist.

Suggested Citation

  • Marcus Berliant & John H. Y. Edwards, 2004. "Efficient Allocations in Club Economies," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 6(1), pages 43-63, February.
    • Handle: RePEc:bla:jpbect:v:6:y:2004:i:1:p:43-63
    DOI: 10.1111/j.1467-9779.2004.00156.x
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