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Justifying the Lindahl solution as an outcome of fair cooperation

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  • Wolfgang Buchholz

    ()

  • Wolfgang Peters

    ()

Abstract

The Lindahl equilibrium is mostly motivated by a rather artificial price mechanism. Even though the analogy to a competitive market has been emphasised by Lindahl himself his approach does not directly explain the normative ideas, which are behind this concept. In the present paper we therefore show how the Lindahl equilibrium can be deduced from some simple equity axioms that in particular are related to the equal sacrifice principle and a non-envy postulate as norms for distributional equity. Fairness among agents with different preferences is taken into account by considering their marginal willingnesses to pay as virtual prices. In this way it might also become more understandable why the Lindahl solution can be perceived as an outcome of fair cooperation.

(This abstract was borrowed from another version of this item.)

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Bibliographic Info

Article provided by Springer in its journal Public Choice.

Volume (Year): 133 (2007)
Issue (Month): 1 (October)
Pages: 157-169

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Handle: RePEc:kap:pubcho:v:133:y:2007:i:1:p:157-169

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Web page: http://www.springerlink.com/link.asp?id=100332

Related research

Keywords: Public goods; Lindahl equilibrium; Benefit principle; Fairness; Equity; C 78; D 63; H 41;

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References

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Citations

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Cited by:
  1. Konrad, Kai A. & Skaperdas, Stergios, 2012. "The market for protection and the origin of the state," Munich Reprints in Economics 13961, University of Munich, Department of Economics.
  2. Wolfgang Buchholz & Wolfgang Peters, 2008. "Equal sacrifice and fair burden-sharing in a public goods economy," International Tax and Public Finance, Springer, vol. 15(4), pages 415-429, August.
  3. Wolfgang Buchholz & Richard Cornes & Wolfgang Peters, 2008. "Existence, uniqueness and some comparative statics for ratio and Lindahl equilibria," Journal of Economics, Springer, vol. 95(2), pages 167-177, November.

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