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Lindahl prices solve the NIMBY problem

  • Jeremy Laurent-lucchetti


    (Department of Economics and Oeschger Center for Climate Change, University of Bern)

  • Justin Leroux


    (HEC Montréal)

The siting of public facilities such as prisons or waste disposal facilities typically faces rejection by local populations (the "NIMBY" syndrome, for Not In My BackYard). These public goods exhibit a private bad aspect creating an asymmetry: all involved communities benefit from their existence, but only the host bears the local negative externality. We show that the well-known Lindahl pricing scheme constitutes the only cost-sharing method satisfying a set of properties specifically designed to handle the siting problem.

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Article provided by AccessEcon in its journal Economics Bulletin.

Volume (Year): 30 (2010)
Issue (Month): 3 ()
Pages: 2457-2463

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Handle: RePEc:ebl:ecbull:eb-10-00469
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  1. David P�rez-Castrillo & David Wettstein, 2002. "Choosing Wisely: A Multibidding Approach," American Economic Review, American Economic Association, vol. 92(5), pages 1577-1587, December.
  2. Laurent-Lucchetti, Jérémy & Leroux, Justin, 2011. "Choosing and sharing," Games and Economic Behavior, Elsevier, vol. 73(1), pages 296-300, September.
  3. O'Sullivan Arthur, 1993. "Voluntary Auctions for Noxious Facilities: Incentives to Participate and the Efficiency of Siting Decisions," Journal of Environmental Economics and Management, Elsevier, vol. 25(1), pages S12-S26, July.
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