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Existence and Warr Neutrality for Matching Equilibria in a Public Good Economy: An Aggregative Game Approach

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  • Wolfgang Buchholz
  • Richard Cornes
  • Dirk T. G. Rübbelke

Abstract

Using the aggregative game approach as developed by Cornes and Hartley (2003, 2007) this paper analyzes the conditions under which matching mechanisms in a public good economy lead to interior matching equilibria in which all agents make strictly positive flat contributions to the public good. In particular we show that the distribution of income among the agents is a crucial determinant for the existence of interior matching equilibria. In addition, we explore which matching mechanisms show Warr neutrality and how the size of the economy affects the possibility of implementing a certain type of Pareto optimal solutions through matching.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2009/wp-cesifo-2009-12/cesifo1_wp2884.pdf
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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 2884.

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Date of creation: 2009
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Handle: RePEc:ces:ceswps:_2884

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  1. Josef Falkinger & Johann K. Brunner, 1999. "Taxation in an economy with private provision of public goods," Review of Economic Design, Springer, vol. 4(4), pages 357-379.
  2. Cornes, Richard & Sandler, Todd, 1985. "The Simple Analytics of Pure Public Good Provision," Economica, London School of Economics and Political Science, vol. 52(205), pages 103-16, February.
  3. Andreoni, J. & Bergstrom, T., 1992. "Do Government Subsidies Increase the Private Supply of Public Good," Working papers 9207, Wisconsin Madison - Social Systems.
  4. Matthew J. Kotchen, 2009. "Voluntary Provision of Public Goods for Bads: A Theory of Environmental Offsets," Economic Journal, Royal Economic Society, vol. 119(537), pages 883-899, 04.
  5. Robin Boadway & Zhen Song & Jean-Francois Tremblay, 2006. "Commitment and Matching Contributions to Public Goods," Working Papers 1067, Queen's University, Department of Economics.
  6. Georg KIRCHSTEIGER & Clemens PUPPE, 1996. "On the Possibility of Efficient Private Provision of Public Goods through Government Subsidies," Vienna Economics Papers vie9608, University of Vienna, Department of Economics.
  7. Roger Hartley & Richard Cornes, 2003. "Aggregative Public Good Games," Keele Economics Research Papers KERP 2003/05, Centre for Economic Research, Keele University.
  8. Boadway, R.W. & Pestieau, P. & Wildasin, D.E., 1987. "Tax-transfer policies and the voluntary provision of public goods," CORE Discussion Papers 1987019, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  9. Warr, Peter G., 1982. "Pareto optimal redistribution and private charity," Journal of Public Economics, Elsevier, vol. 19(1), pages 131-138, October.
  10. Falkinger, Josef, 1996. "Efficient private provision of public goods by rewarding deviations from average," Journal of Public Economics, Elsevier, vol. 62(3), pages 413-422, November.
  11. Wolfgang Buchholz & Richard Cornes & Wolfgang Peters, 2006. "On the Frequency of Interior Cournot- Nash Equilibria in a Public Good Economy," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 8(3), pages 401-408, 08.
  12. Cornes, Richard & Hartley, Roger, 2003. " Risk Aversion, Heterogeneity and Contests," Public Choice, Springer, vol. 117(1-2), pages 1-25, October.
  13. Bergstrom, Theodore & Blume, Lawrence & Varian, Hal, 1986. "On the private provision of public goods," Journal of Public Economics, Elsevier, vol. 29(1), pages 25-49, February.
  14. Althammer, Wilhelm & Buchholz, Wolfgang, 1993. "Lindahl-equilibria as the outcome of a non-cooperative game : A reconsideration," European Journal of Political Economy, Elsevier, vol. 9(3), pages 399-405, August.
  15. Cornes,Richard & Sandler,Todd, 1996. "The Theory of Externalities, Public Goods, and Club Goods," Cambridge Books, Cambridge University Press, number 9780521477185, Fall.
  16. Danziger, Leif & Schnytzer, Adi, 1991. "Implementing the Lindahl voluntary-exchange mechanism," European Journal of Political Economy, Elsevier, vol. 7(1), pages 55-64, April.
  17. Guttman, Joel M, 1978. "Understanding Collective Action: Matching Behavior," American Economic Review, American Economic Association, vol. 68(2), pages 251-55, May.
  18. Roberts, Russell D, 1987. "Financing Public Goods," Journal of Political Economy, University of Chicago Press, vol. 95(2), pages 420-37, April.
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Cited by:
  1. Buchholz, Wolfgang & Cornes, Richard & Rübbelke, Dirk, 2011. "Interior matching equilibria in a public good economy: An aggregative game approach," Journal of Public Economics, Elsevier, vol. 95(7), pages 639-645.

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