On the Frequency of Interior Cournot-Nash Equilibria in a Public Good Economy
AbstractIn a public good economy the distribution of initial income is an important determinant of how many individuals contribute to the public good. For the case when all individuals have identical preferences in this paper a simple formula is derived that describes the proportion of all income distributions for which an interior Cournot-Nash equilibrium will result in which every agent makes a strictly positive contribution to the public good. This formula is then applied to a standard Cobb-Douglas utility function showing that the likelihood of interior Cournot-Nash equilibria falls dramatically when the number of individuals is increased. The implications this result might have for the significance of Shibata-Warr neutrality are finally discussed.
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Bibliographic InfoPaper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 982.
Date of creation: 2003
Date of revision:
private provision of public goods; Cournot-Nash equilibria; Shibata-Warr neutrality;
Other versions of this item:
- 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.
- NEP-ALL-2004-05-02 (All new papers)
- NEP-MIC-2004-05-02 (Microeconomics)
- NEP-PBE-2004-05-02 (Public Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Richard Cornes & Roger Hartley, 2007.
"Aggregative Public Good Games,"
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- Wolfgang Buchholz & Richard Cornes & Dirk T. G. Rübbelke, 2009. "Existence and Warr Neutrality for Matching Equilibria in a Public Good Economy: An Aggregative Game Approach," CESifo Working Paper Series 2884, CESifo Group Munich.
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