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On the Private Provision of Public Goods: A Diagrammatic Exposition

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  • Ley, E.

Abstract

This paper surveys a selection of the literature on the private provision of public goods using the Kolm triangle. (The Kolm triangle is the analogue of an Edgeworth box in an economy with a public good.) We provide simple geometrical proofs of various established results using this graphical device. Our reference framework is the model of private contributions to public goods developed by Bergstrom, Blume and Varian (1986). With the Kolm triangle, we can easily study the existence and uniqueness of Nash equilibria, the effects of redistribution of the initial wealth, the level of provision in Stackelberg equilibria, the effects of subsidizing private contributions, and the implementation of Lindahl equilibria.

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Bibliographic Info

Paper provided by Michigan - Center for Research on Economic & Social Theory in its series Papers with number 93-27.

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Length: 18 pages
Date of creation: 1993
Date of revision:
Handle: RePEc:fth:michet:93-27

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Postal: UNIVERSITY OF MICHIGAN, DEPARTMENT OF ECONOMICS CENTER FOR RESEARCH ON ECONOMIC AND SOCIAL THEORY, ANN ARBOR MICHIGAN U.S.A.

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Keywords: public services ; game theory;

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References

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  1. BOADWAY, Robin & PESTIEAU, Pierre & WILDASIN, David, . "Tax-transfer policies and the voluntary provision of public goods," CORE Discussion Papers RP -856, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  2. Konrad, Kai A & Lommerud, Kjell Erik, 1995. " Family Policy with Non-cooperative Families," Scandinavian Journal of Economics, Wiley Blackwell, vol. 97(4), pages 581-601, December.
  3. Bergstrom, Ted, 1989. "Love and Spaghetti, the Opportunity Cost of Virtue," Journal of Economic Perspectives, American Economic Association, vol. 3(2), pages 165-73, Spring.
  4. Wilson, L. S., 1992. "The Harambee movement and efficient public good provision in Kenya," Journal of Public Economics, Elsevier, vol. 48(1), pages 1-19, June.
  5. Shibata, Hirofumi, 1971. "A Bargaining Model of the Pure Theory of Public Expenditure," Journal of Political Economy, University of Chicago Press, vol. 79(1), pages 1-29, Jan.-Feb..
  6. Varian, H.R., 1991. "Sequential Provision of Public Goods," Papers 14, Michigan - Center for Research on Economic & Social Theory.
  7. Schlesinger, Harris, 1989. "On the Analytics of Pure Public Good Provision," Public Finance = Finances publiques, , vol. 44(1), pages 102-09.
  8. Kemp, Murray C., 1984. "A note of the theory of international transfers," Economics Letters, Elsevier, vol. 14(2-3), pages 259-262.
  9. Graciela Chichilnisky & Geoffrey Heal, 1993. "Who Should Abate Carbon Emissions? An International Viewpoint," NBER Working Papers 4425, National Bureau of Economic Research, Inc.
  10. Hoel, Michael, 1991. "Global environmental problems: The effects of unilateral actions taken by one country," Journal of Environmental Economics and Management, Elsevier, vol. 20(1), pages 55-70, January.
  11. Thomson, William, 1999. " Economies with Public Goods: An Elementary Geometric Exposition," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 1(1), pages 139-76.
  12. Chander, Parkash, 1993. "Dynamic Procedures and Incentives in Public Good Economies," Econometrica, Econometric Society, vol. 61(6), pages 1341-54, November.
  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. Cornes,Richard & Sandler,Todd, 1996. "The Theory of Externalities, Public Goods, and Club Goods," Cambridge Books, Cambridge University Press, number 9780521477185, April.
  15. Danziger, Leif & Schnytzer, Adi, 1991. "Implementing the Lindahl voluntary-exchange mechanism," European Journal of Political Economy, Elsevier, vol. 7(1), pages 55-64, April.
  16. 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.
  17. Danziger, Leif, 1976. "A graphic representation of the Nash and Lindahl equilibria in an economy with a public good," Journal of Public Economics, Elsevier, vol. 6(3), pages 295-307, October.
  18. Gradstein, Mark & Nitzan, Shmuel & Slutsky, Steven, 1994. "Neutrality and the private provision of public goods with incomplete information," Economics Letters, Elsevier, vol. 46(1), pages 69-75, September.
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Citations

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Cited by:
  1. Göran Bostedt, 1999. "Threatened Species as Public Goods and Public Bads," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 13(1), pages 59-73, January.
  2. Valérie Lechene & Ian Preston, 2007. "Demand properties in household Nash equilibrium," IFS Working Papers W07/01, Institute for Fiscal Studies.
  3. Lechene, Valérie & Preston, Ian, 2011. "Noncooperative household demand," Journal of Economic Theory, Elsevier, vol. 146(2), pages 504-527, March.
  4. Valérie Lechene & Ian Preston, 2005. "Household Nash equilibrium with voluntarily contributed public goods," IFS Working Papers W05/06, Institute for Fiscal Studies.
  5. David P. Myatt & Chris Wallace, 2002. "Equilibrium Selection and Public Good Provision," Economics Series Working Papers 103, University of Oxford, Department of Economics.
  6. Shrestha, Ram K. & Alavalapati, Janaki R. R., 2004. "Valuing environmental benefits of silvopasture practice: a case study of the Lake Okeechobee watershed in Florida," Ecological Economics, Elsevier, vol. 49(3), pages 349-359, July.
  7. Carmen Marcuello & Vicente Salas, 2000. "Money and time donations to Spanish Non Governmental Organizations for development aid," Investigaciones Economicas, Fundación SEPI, vol. 24(1), pages 51-73, January.
  8. David P. Myatt & Chris Wallace, 2003. "Evolution in Teams," Economics Series Working Papers 177, University of Oxford, Department of Economics.
  9. Itaya, Jun-ichi & de Meza, David & Myles, Gareth D., 1997. "In praise of inequality: public good provision and income distribution," Economics Letters, Elsevier, vol. 57(3), pages 289-296, December.

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