Mixed Markets with Public Goods
AbstractWe use a mixed market model for analyzing economies with public projects in which the condition of perfect competition is violated. We discuss core-equivalence results in the general framework of non-Euclidean representation of the collective goods. We show that if large traders are similar to each other, then they lose their market power and hence the equivalence theorem can be restored. This is possible assuming a cost distribution function to fix the fraction that each large or small agent is expected to cover of the total cost of providing the project. We show that, for each given individual and coalitional contribution scheme, the resulting core is equivalent to the corresponding linear cost share equilibria. Finally, we investigate on weaker equivalences when the assumption that all large traders are of the same type is dropped. An analysis of mixed markets with public goods via atomless economies is provided, joint with an extension of Schmeidler and Vind results on the measure of blocking coalitions.
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Bibliographic InfoPaper provided by Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy in its series CSEF Working Papers with number 261.
Date of creation: 23 Jan 2010
Date of revision: 29 May 2012
Mixed markets; coalitional fairness; envy; efficiency; asymmetric information;
Find related papers by JEL classification:
- C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
- D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-10-23 (All new papers)
- NEP-CTA-2010-10-23 (Contract Theory & Applications)
- NEP-PBE-2010-10-23 (Public Economics)
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- Maria Graziano & Maria Romaniello, 2012.
"Linear cost share equilibria and the veto power of the grand coalition,"
Social Choice and Welfare,
Springer, vol. 38(2), pages 269-303, February.
- Maria Gabriella Graziano & Maria Romaniello, 2010. "Linear Cost Share Equilibria and the Veto Power of the Grand Coalition," CSEF Working Papers 248, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
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