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Bargaining over public goods

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In a simple public good economy, we propose a natural bargaining procedure whose equilibria converge to Lindahl allocations as the cost of bargaining vanishes. The procedure splits the decision over the allocation in a decision about personalized prices and a decision about output levels for the public good. Since this procedure does not assume price-taking behavior, it provides a strategic foundation for the personalized taxes inherent to the Lindahl solution to the public goods problem.

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File URL: ftp://mse.univ-paris1.fr/pub/mse/CES2008/B08041.pdf
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Bibliographic Info

Paper provided by Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne in its series Documents de travail du Centre d'Economie de la Sorbonne with number b08041.

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Length: 15 pages
Date of creation: Jun 2008
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Handle: RePEc:mse:cesdoc:b08041

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Keywords: Public goods; bargaining; alternating offers.;

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  1. Groves, Theodore & Ledyard, John O, 1977. "Optimal Allocation of Public Goods: A Solution to the "Free Rider" Problem," Econometrica, Econometric Society, vol. 45(4), pages 783-809, May.
  2. Ariel Rubinstein, 2010. "Perfect Equilibrium in a Bargaining Model," Levine's Working Paper Archive 252, David K. Levine.
  3. Dávila, J. & Eeckhout, J., 2008. "Competitive bargaining equilibrium," Journal of Economic Theory, Elsevier, vol. 139(1), pages 269-294, March.
  4. Harrington, Joseph Jr., 1989. "The advantageous nature of risk aversion in a three-player bargaining game where acceptance of a proposal requires a simple majority," Economics Letters, Elsevier, vol. 30(3), pages 195-200, September.
  5. 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.
  6. Banks, Jeffrey S. & Duggan, John, 1999. "A Bargaining Model of Collective Choice," Working Papers 1053, California Institute of Technology, Division of the Humanities and Social Sciences.
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Cited by:
  1. Ana, MAULEON & Vincent, VANNETELBOSCH, 2005. "Market Integration and Strike Activity," Discussion Papers (ECON - Département des Sciences Economiques) 2005025, Université catholique de Louvain, Département des Sciences Economiques.
  2. MAULEON, Ana & SONG, Huasheng & VANNETELBOSCH, Vincent, 2006. "Networks of free trade agreements among heterogeneous countries," CORE Discussion Papers 2006053, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  3. Gillis, Nicolas, 2010. "Using underapproximations for sparse nonnegative matrix factorization," Open Access publications from Université catholique de Louvain info:hdl:2078.1/29700, Université catholique de Louvain.
  4. Bochet, Olivier, 2010. "Virtual Nash implementation with admissible support," Open Access publications from Université catholique de Louvain info:hdl:2078.1/33462, Université catholique de Louvain.
  5. Thisse, Jacques-François, 2010. "Toward a unified theory of economic geography an urban economics," Open Access publications from Université catholique de Louvain info:hdl:2078.1/30406, Université catholique de Louvain.
  6. Koenig, Pamina, 2010. "Local export spillovers in France," Open Access publications from Université catholique de Louvain info:hdl:2078.1/33465, Université catholique de Louvain.

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