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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- Cornes,Richard & Sandler,Todd, 1996. "The Theory of Externalities, Public Goods, and Club Goods," Cambridge Books, Cambridge University Press, number 9780521477185, August.
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- Valery Vasil'ev & Shlomo Weber & Hans Wiesmeth, 1991. "The Equivalence of Core and Lindahl Equilibria in an Economy with Semi-Public Goods," Discussion Paper Serie B 200, University of Bonn, Germany.
- 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. Full references (including those not matched with items on IDEAS)
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