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The Purity of Impure Public Goods

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  • Anja Brumme
  • Wolfgang Buchholz
  • Dirk Rübbelke

Abstract

In this paper we demonstrate how the impure public good model can be converted into a pure public good model with satiation of private consumption, which can be handled more easily, by using a variation of the aggregative game approach as devised by Cornes and Hartley (2007). We point out the conditions for impure public good utility functions that allow for this conversion through which the analysis of Nash equilibria can be conducted in a unified way for the impure and the pure public good model and which facilitates comparative statics analysis for impure public goods. Our approach also offers new insights on the determinants for becoming a contributor to the public good in the impure case as well as on the non-neutral effects of income transfers on Nash equilibria when the public good is impure.

Suggested Citation

  • Anja Brumme & Wolfgang Buchholz & Dirk Rübbelke, 2021. "The Purity of Impure Public Goods," CESifo Working Paper Series 8852, CESifo.
    • Handle: RePEc:ces:ceswps:_8852
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    More about this item

    Keywords

    impure public goods; warm-glow giving; Nash equilibria; aggregative game approach;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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