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A Core-equilibrium Convergence in an Economy with Public Goods

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  • Nizar Allouch

    (Queen Mary, University of London)

Abstract

This paper deals with a core-equilibrium equivalence in an economy with public goods where preferences of consumers display warm glow effects. We demonstrate that provided that each consumer becomes satiated to other consumers provision, it holds that, for a sufficiently large economy, the set of Edgeworth allocations is non-empty. Moreover, we show that an Edgeworth allocation could be decentralized as a warm glow equilibrium.

Suggested Citation

  • Nizar Allouch, 2009. "A Core-equilibrium Convergence in an Economy with Public Goods," Working Papers 642, Queen Mary University of London, School of Economics and Finance.
    • Handle: RePEc:qmw:qmwecw:642
    as

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    File URL: https://www.qmul.ac.uk/sef/media/econ/research/workingpapers/2009/items/wp642.pdf
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    References listed on IDEAS

    as
    1. Champsaur, Paul & Roberts, Donald John & Rosenthal, Robert W, 1975. "On Cores in Economies with Public Goods," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 16(3), pages 751-764, October.
    2. MONIQUE FLORENZANO & ELENA L. Del MERCATO, 2006. "Edgeworth and Lindahl–Foley equilibria of a General Equilibrium Model with Private Provision of Pure Public Goods," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 8(5), pages 713-740, December.
    3. Foley, Duncan K, 1970. "Lindahl's Solution and the Core of an Economy with Public Goods," Econometrica, Econometric Society, vol. 38(1), pages 66-72, January.
    4. B. Douglas Bernheim & Antonio Rangel, 2005. "Behavioral Public Economics: Welfare and Policy Analysis with Non-Standard Decision-Makers," NBER Working Papers 11518, National Bureau of Economic Research, Inc.
    5. Milleron, Jean-Claude, 1972. "Theory of value with public goods: A survey article," Journal of Economic Theory, Elsevier, vol. 5(3), pages 419-477, December.
    6. Demange,Gabrielle & Wooders,Myrna (ed.), 2005. "Group Formation in Economics," Cambridge Books, Cambridge University Press, number 9780521842716.
    7. Conley John P., 1994. "Convergence Theorems on the Core of a Public Goods Economy: Sufficient Conditions," Journal of Economic Theory, Elsevier, vol. 62(1), pages 161-185, February.
    8. Muench, Thomas J., 1972. "The core and the Lindahl equilibrium of an economy with a public good: an example," Journal of Economic Theory, Elsevier, vol. 4(2), pages 241-255, April.
    9. Gerard Debreu, 1963. "On a Theorem of Scarf," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 30(3), pages 177-180.
    10. Andreoni, James, 1989. "Giving with Impure Altruism: Applications to Charity and Ricardian Equivalence," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1447-1458, December.
    11. Andreoni, James, 1990. "Impure Altruism and Donations to Public Goods: A Theory of Warm-Glow Giving?," Economic Journal, Royal Economic Society, vol. 100(401), pages 464-477, June.
    12. Wooders, Myrna Holtz, 1983. "The epsilon core of a large replica game," Journal of Mathematical Economics, Elsevier, vol. 11(3), pages 277-300, July.
    13. Roberts, Donald John, 1974. "The Lindahl solution for economies with public goods," Journal of Public Economics, Elsevier, vol. 3(1), pages 23-42, February.
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    More about this item

    Keywords

    Competitive equilibrium; Warm glow; Public goods; Edgeworth; Core; Decentralization;
    All these keywords.

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers

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