The Edgeworth Conjecture in a Public Goods Economy: An Elementary Example
We show by a simple example that in a public goods economy consisting of identical individuals with symmetric Cobb-Douglas preferences the core of the economy does not con-verge to the Lindahl solution when the number of agents goes to infinity. This confirms in an elementary way that the Edgeworth conjecture does not necessarily hold in an economy with a public good.
Volume (Year): 8 (2007)
Issue (Month): 6 ()
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- Ellickson, Bryan, 1978. "Public goods and joint supply," Journal of Public Economics, Elsevier, vol. 9(3), pages 373-382, June.
- Vasilev, V. & Weber, S. & Wiesmeth, H., 1991.
"The Equivalence of Core and Lindahl Equilibria in an Economy with Semi- Public Goods,"
91-13, York (Canada) - Department of Economics.
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- Weber, Shlomo & Wiesmeth, Hans, 1991. "The equivalence of core and cost share equilibria in an economy with a public good," Journal of Economic Theory, Elsevier, vol. 54(1), pages 180-197, June.
- 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.
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