Equilibrium Contributions and “Locally Enjoyed” Public Goods
AbstractThe main results of the traditional theory of private provision of public goods in the case of identical individuals are: 1) there exists a unique Nash equilibrium pattern of contributions in which everybody contributes the same amount (Bergstrom et al. ); 2) this pattern is locally stable (Cornes ). Under homothetic preferences, I show that these results generally no longer hold in the context of “locally enjoyed” public goods. In particular, when the symmetric Nash equilibrium is not the unique equilibrium pattern, it is locally unstable and there exists at least a locally stable asymmetric Nash equilibrium.
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Bibliographic InfoPaper provided by University of Milano-Bicocca, Department of Economics in its series Working Papers with number 84.
Length: 31 pages
Date of creation: Nov 2004
Date of revision: Nov 2004
Local Interaction; Public Goods; Nash Equilibria;
Find related papers by JEL classification:
- C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
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