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The provision and pricing of excludable public goods: Ramsey-Boiteux pricing versus bundling

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  • Hellwig, Martin F.

Abstract

This paper studies the relation between Bayesian mechanism design and the Ramsey-Boiteux approach to the provision and pricing of excludable public goods. For a large economy with private information about individual preferences, the two approaches are shown to be equivalent if and only if, in addition to incentive compatibility and participation constraints, the .nal allocation of private-good consumption and admission tickets to public goods satis.es a condition of renegotiation proofness. Without this condition, a mechanism involving mixed bundling, i.e. combination tickets at a discount, is superior.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Public Economics.

Volume (Year): 91 (2007)
Issue (Month): 3-4 (April)
Pages: 511-540

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Handle: RePEc:eee:pubeco:v:91:y:2007:i:3-4:p:511-540

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Web page: http://www.elsevier.com/locate/inca/505578

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Cited by:
  1. James B. Davies & Al Slivinski, 2005. "The Public Role in Provision of Scientific Information: An Economic Approach," University of Western Ontario, Economic Policy Research Institute Working Papers 20051, University of Western Ontario, Economic Policy Research Institute.
  2. Felix Bierbrauer, 2010. "An incomplete contracts perspective on the provision and pricing of excludable public goods," Working Paper Series of the Max Planck Institute for Research on Collective Goods, Max Planck Institute for Research on Collective Goods 2010_01, Max Planck Institute for Research on Collective Goods.
  3. Hanming Fang & Peter Norman, 2014. "Toward an efficiency rationale for the public provision of private goods," Economic Theory, Springer, Springer, vol. 56(2), pages 375-408, June.

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