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On the Private Provision of Public Goods: A Diagrammatic Exposition

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  • Eduardo Ley

    (IMF)

Abstract

This paper surveys a selection of the literature on the private provision of public goods using the Kolm triangle. (The Kolm triangle is the analogue of an Edgeworth box in an economy with a public good.) We provide simple geometrical proofs of various established results using this graphical device. Our reference framework is the model of private contributions to public goods developed by Bergstrom, Blume and Varian (1986). With the Kolm triangle, we can easily study the existence and uniqueness of Nash equilibria, the effects of redistribution of the initial wealth, the level of provision in Stackelberg equilibria, the effects of subsidizing private contributions, and the implementation of Lindahl equilibria.

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File URL: http://128.118.178.162/eps/pe/papers/9503/9503001.pdf
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Bibliographic Info

Paper provided by EconWPA in its series Public Economics with number 9503001.

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Date of creation: 21 Mar 1995
Date of revision: 15 Jul 1995
Handle: RePEc:wpa:wuwppe:9503001

Note: Section 5.2 on welfare-enhancing regressive redistributions was added in December 2002.
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Web page: http://128.118.178.162

Related research

Keywords: Public Goods; Nash Equilibrium; Stackelberg Equilibrium; Lindahl Equilibrium; Kolm triangle; Redistribution; Subsidies; Regressive Redistribution of Income;

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References

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  1. Varian, H.R., 1991. "Sequential Provision of Public Goods," Papers 14, Michigan - Center for Research on Economic & Social Theory.
  2. Chander, Parkash, 1993. "Dynamic Procedures and Incentives in Public Good Economies," Econometrica, Econometric Society, vol. 61(6), pages 1341-54, November.
  3. Bergstrom, Theodore & Blume, Lawrence & Varian, Hal, 1986. "On the private provision of public goods," Journal of Public Economics, Elsevier, vol. 29(1), pages 25-49, February.
  4. Hoel, Michael, 1991. "Global environmental problems: The effects of unilateral actions taken by one country," Journal of Environmental Economics and Management, Elsevier, vol. 20(1), pages 55-70, January.
  5. Gradstein, Mark & Nitzan, Shmuel & Slutsky, Steven, 1994. "Neutrality and the private provision of public goods with incomplete information," Economics Letters, Elsevier, vol. 46(1), pages 69-75, September.
  6. Robin Boadway & Pierre Pestieau & David Wildasin, 1987. "Tax-Transfer Policies and the Voluntary Provision of Public Goods," Working Papers 682, Queen's University, Department of Economics.
  7. Wilson, L. S., 1992. "The Harambee movement and efficient public good provision in Kenya," Journal of Public Economics, Elsevier, vol. 48(1), pages 1-19, June.
  8. Chichilnisky, Graciela & Heal, Geoffrey, 1994. "Who should abate carbon emissions? : An international viewpoint," Economics Letters, Elsevier, vol. 44(4), pages 443-449, April.
  9. Cornes, Richard & Sandler, Todd, 1985. "The Simple Analytics of Pure Public Good Provision," Economica, London School of Economics and Political Science, vol. 52(205), pages 103-16, February.
  10. Cornes,Richard & Sandler,Todd, 1996. "The Theory of Externalities, Public Goods, and Club Goods," Cambridge Books, Cambridge University Press, number 9780521477185, October.
  11. Konrad, Kai A & Lommerud, Kjell Erik, 1995. " Family Policy with Non-cooperative Families," Scandinavian Journal of Economics, Wiley Blackwell, vol. 97(4), pages 581-601, December.
  12. Schlesinger, Harris, 1989. "On the Analytics of Pure Public Good Provision," Public Finance = Finances publiques, , vol. 44(1), pages 102-09.
  13. Danziger, Leif & Schnytzer, Adi, 1991. "Implementing the Lindahl voluntary-exchange mechanism," European Journal of Political Economy, Elsevier, vol. 7(1), pages 55-64, April.
  14. Shibata, Hirofumi, 1971. "A Bargaining Model of the Pure Theory of Public Expenditure," Journal of Political Economy, University of Chicago Press, vol. 79(1), pages 1-29, Jan.-Feb..
  15. Bergstrom, Ted, 1989. "Love and Spaghetti, the Opportunity Cost of Virtue," Journal of Economic Perspectives, American Economic Association, vol. 3(2), pages 165-73, Spring.
  16. 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.
  17. Danziger, Leif, 1976. "A graphic representation of the Nash and Lindahl equilibria in an economy with a public good," Journal of Public Economics, Elsevier, vol. 6(3), pages 295-307, October.
  18. Kemp, Murray C., 1984. "A note of the theory of international transfers," Economics Letters, Elsevier, vol. 14(2-3), pages 259-262.
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Citations

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Cited by:
  1. David P. Myatt & Chris Wallace, 2002. "Equilibrium Selection and Public Good Provision," Economics Series Working Papers 103, University of Oxford, Department of Economics.
  2. David P. Myatt & Chris Wallace, 2003. "Evolution in Teams," Economics Series Working Papers 177, University of Oxford, Department of Economics.
  3. Göran Bostedt, 1999. "Threatened Species as Public Goods and Public Bads," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 13(1), pages 59-73, January.
  4. Valerie Lechene & Ian Preston, 2005. "Household Nash Equilibrium with Voluntarily Contributed Public Goods," Economics Series Working Papers 226, University of Oxford, Department of Economics.
  5. Valérie Lechene & Ian Preston, 2008. "Non cooperative household demand," IFS Working Papers W08/14, Institute for Fiscal Studies.
  6. Itaya, Jun-ichi & de Meza, David & Myles, Gareth D., 1997. "In praise of inequality: public good provision and income distribution," Economics Letters, Elsevier, vol. 57(3), pages 289-296, December.
  7. Shrestha, Ram K. & Alavalapati, Janaki R. R., 2004. "Valuing environmental benefits of silvopasture practice: a case study of the Lake Okeechobee watershed in Florida," Ecological Economics, Elsevier, vol. 49(3), pages 349-359, July.
  8. Carmen Marcuello & Vicente Salas, 2000. "Money and time donations to Spanish Non Governmental Organizations for development aid," Investigaciones Economicas, Fundación SEPI, vol. 24(1), pages 51-73, January.
  9. Valérie Lechene & Ian Preston, 2007. "Demand properties in household Nash equilibrium," IFS Working Papers W07/01, Institute for Fiscal Studies.

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