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Exclusion and the Theory of Clubs

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Author Info
Robert W. Helsley
William C. Strange

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Abstract

This paper examines the competitive provision of club goods with costly exclusion. The authors consider two exclusion regimes: fine and coarse. With fine exclusion, a provider can charge both a membership fee and a per use price. With coarse exclusion, a provider can charge a membership fee only. The authors show that competitive club good providers choose both the efficient exclusion regime, which depends on the costs of exclusion, and the associated efficient resource allocation. Thus, with costly exclusion, the competitive provision of club goods is constrained Pareto efficient.

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Publisher Info
Article provided by Canadian Economics Association in its journal Canadian Journal of Economics.

Volume (Year): 24 (1991)
Issue (Month): 4 (November)
Pages: 889-99
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Handle: RePEc:cje:issued:v:24:y:1991:i:4:p:889-99

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  1. John P. Conley & Myrna Holtz Wooders, 1995. "Anonymous Lindahl Pricing in a Tiebout Economy with Crowding Types," Working Papers mwooders-98-02, University of Toronto, Department of Economics. [Downloadable!]
    Other versions:
  2. Ramayya Krishnan & Michael D. Smith & Zhulei Tang & Rahul Telang, 2007. "Digital Business Models for Peer-to-Peer Networks: Analysis and Economic Issue," Review of Network Economics, Concept Economics, vol. 6(2), pages 194-213, June. [Downloadable!]
  3. Swope, Kurtis J. & Janeba, Eckhard, 2001. "Taxes or Fees? The Political Economy of Providing Excludable Public Goods," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
  4. Christoph Engel, 2007. "Competition in a Pure World of Internet Telephony," Working Paper Series of the Max Planck Institute for Research on Collective Goods 2007_1, Max Planck Institute for Research on Collective Goods. [Downloadable!]
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