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Bargaining over public goods

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Author Info
Julio Davila () (Centre d'Economie de la Sorbonne - Paris School of Economics)
Jan Eeckhout () (University of Pennsylvania)
César Martinelli () (Instituto Technologico Autonomo de Mexico)

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Abstract

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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Publisher 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
Date of revision:
Handle: RePEc:mse:cesdoc:b08041

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Web page: http://ces.univ-paris1.fr/
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Related research
Keywords: Public goods; bargaining; alternating offers.;

Other versions of this item:

Find related papers by JEL classification:
C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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References listed on IDEAS
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.:
  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. [Downloadable!] (restricted)
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  2. Dávila, J. & Eeckhout, J., 2008. "Competitive bargaining equilibrium," Journal of Economic Theory, Elsevier, vol. 139(1), pages 269-294, March. [Downloadable!] (restricted)
    Other versions:
  3. Rubinstein, Ariel, 1982. "Perfect Equilibrium in a Bargaining Model," Econometrica, Econometric Society, vol. 50(1), pages 97-109, January. [Downloadable!] (restricted)
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This page was last updated on 2009-11-23.

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