Public Good Menus and Feature Complementarity
AbstractThe distance metric on the location space for multidimensional public good varieties represents complementarity between the goods features. "Euclidean" feature complementarity has atypical strong properties that lead to a failure of intuition about the optimal-menu design problem. If the population is heterogeneous, increasing the distance between two varieties is welfare-improving in Euclidean space, but not generally. A basic optimal-direction principle always applies: "anticonvex" menu changes increase participation and surplus. A menu replacement is anticonvex if it moves the varieties apart in the common line space. The result extends to some impure public goods with break-even pricing and variety-specic costs. A sufficient condition for menus to be Pareto-optimal is that "personal price" (nominal price plus perceived distance from a variety) is linear in the norm that induces the distance metric.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by The University of Melbourne in its series Department of Economics - Working Papers Series with number 962.
Length: 37 pages
Date of creation: 2006
Date of revision:
Contact details of provider:
Postal: Department of Economics, The University of Melbourne, 5th Floor, Economics and Commerce Building, Victoria, 3010, Australia
Phone: +61 3 8344 5289
Fax: +61 3 8344 6899
Web page: http://www.economics.unimelb.edu.au
More information through EDIRC
Public Good Menus; complementarity;
Find related papers by JEL classification:
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
- D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
- D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
- R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies
- R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-04-22 (All new papers)
- NEP-MIC-2006-04-22 (Microeconomics)
- NEP-PBE-2006-04-22 (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.:
- Perroni, Carlo & Scharf, Kimberly A, 2001.
"Tiebout with Politics: Capital Tax Competition and Constitutional Choices,"
Review of Economic Studies,
Wiley Blackwell, vol. 68(1), pages 133-54, January.
- Carlo Perroni & Kimberley A. Scharf, . "Tiebout with Politics: Capital Tax Competition and Constitutional Choices," EPRU Working Paper Series 97-05, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
- Voorneveld, Mark & van den Nouweland, Anne & McLean, Rich, 2008. "An axiomatization of the Euclidean compromise solution," Working Paper Series in Economics and Finance 703, Stockholm School of Economics.
- Ehlers, Lars, 2002.
"Multiple public goods and lexicographic preferences: replacement principle,"
Journal of Mathematical Economics,
Elsevier, vol. 37(1), pages 1-15, February.
- EHLERS, Lars, 2001. "Multiple Public Goods and Lexicographic Preferences Replacement Principle," Cahiers de recherche 2001-25, Universite de Montreal, Departement de sciences economiques.
- Ehlers, L., 2001. "Multiple Public Goods and Lexicographic Preferences Replacement Principle," Cahiers de recherche 2001-25, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
- Lerer, Ehud & Nitzan, Shmuel, 1985. "Some general results on the metric rationalization for social decision rules," Journal of Economic Theory, Elsevier, vol. 37(1), pages 191-201, October.
- Pal, Debashis & Sarkar, Jyotirmoy, 2002. "Spatial competition among multi-store firms," International Journal of Industrial Organization, Elsevier, vol. 20(2), pages 163-190, February.
- Michael L. Katz, 1980. "Multiplant Monopoly in a Spatial Market," Bell Journal of Economics, The RAND Corporation, vol. 11(2), pages 519-535, Autumn.
- Eiichi Miyagawa, 2001. "Locating libraries on a street," Social Choice and Welfare, Springer, vol. 18(3), pages 527-541.
- Ehlers, Lars, 2001. "Independence axioms for the provision of multiple public goods as options," Mathematical Social Sciences, Elsevier, vol. 41(2), pages 239-250, March.
- Ehlers, Lars, 2003. "Multiple public goods, lexicographic preferences, and single-plateaued preference rules," Games and Economic Behavior, Elsevier, vol. 43(1), pages 1-27, April.
- Andreas Pfingsten & Andreas Wagener, 2003. "Bargaining Solutions as Social Compromises," Theory and Decision, Springer, vol. 55(4), pages 359-389, December.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Marisa Cerantola).
If references are entirely missing, you can add them using this form.