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A Case for Private Provision but Collective Ownership of Public Goods

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  • William D. Gerdes

Abstract

One strategy for generating Pareto results in a public good model is to create an environment where traders internalize the public good externality. The model presented here accomplishes this by separating the provision and ownership of public goods. Such goods are privately provided but collectively owned. Under this arrangement, Lindahl prices are generated through the voluntary exchange activities of consumers. Persistent attempts to free ride are not consistent with maximizing behavior which leads to internalization.

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  • William D. Gerdes, 1998. "A Case for Private Provision but Collective Ownership of Public Goods," The American Economist, Sage Publications, vol. 42(1), pages 90-94, March.
    • Handle: RePEc:sae:amerec:v:42:y:1998:i:1:p:90-94
    DOI: 10.1177/056943459804200110
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    References listed on IDEAS

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    1. Groves, Theodore & Ledyard, John O, 1977. "Optimal Allocation of Public Goods: A Solution to the "Free Rider" Problem," Econometrica, Econometric Society, vol. 45(4), pages 783-809, May.
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    5. Theodore Groves, 1979. "Efficient Collective Choice when Compensation is Possible," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 46(2), pages 227-241.
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