Equal Sacrifice and Fair Burden Sharing in a Public Goods Economy
AbstractApplying a willingness to pay approach known from contingent valuation in environmental economics, we develop an ordinally based measure for the size of individual sacrifice that is connected with an agent's contribution to a public good. We construct a selection mechanism that picks the unique efficient solution among all allocations that have an equal sacrifice as defined in this way. We show that the solution thus obtained correspond to Moulin’s egalitarian equivalent allocation, conforms to both the ability to pay and the benefit principles, and has much in common with the Lindahl equilibrium.
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Bibliographic InfoPaper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 1997.
Date of creation: 2007
Date of revision:
public goods; cooperative solutions; fairness; egalitarian equivalent solutions;
Other versions of this item:
- 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.
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
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