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Strategic Interactions and Atoms' Power in Public Goods Economies

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  • Hovav Perets
  • Benyamin Shitovitz

Abstract

In this paper we study the Nash equilibrium in a smooth public goods economy, described as a non-cooperative game, where the set of players is a mixed measure space of consumers. We assume a finite number of private goods. We show that under certain conditions there exists a unique Nash equilibrium in the economy, where the public goods are produced with a linear technology. Moreover, we discuss the difference in market power between an atomless sector and an atom with the same utility function, and an atom with its split atomless sector, both in a pure exchange economy and a public goods economy. JEL Classification: C72, H41.

Suggested Citation

  • Hovav Perets & Benyamin Shitovitz, 2013. "Strategic Interactions and Atoms' Power in Public Goods Economies," Recherches économiques de Louvain, De Boeck Université, vol. 79(4), pages 33-44.
    • Handle: RePEc:cai:reldbu:rel_794_0033
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    Keywords

    public goods; private provision of public goods; Nash equilibrium; mixed measure space of consumers; linear technology;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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