IDEAS home Printed from
   My bibliography  Save this article

Nash behaviour and public good


  • Amedeo Fossati

    () (Diem - University of Genoa)

  • Marcello Montefiori

    () (Diem - University of Genoa)


In this note we analyse the provision of a pure public good with non constant production cost in the context of a federation of jurisdictions with two tiers of Government: the central and the local. The central government aims at welfare maximization but this objective is constrained to the use of lump sum transfer. Local governments aim at their own utility maximization and they behave according to the Nash rule. The production cost for the public good is affected by the jurisdiction's type (high or low) and by the quantity of the good that is produced. It is shown that a social welfare improvement might take place, in some circumstances, even without any central government intervention. On the other hand a first best is unreachable under the hypothesis of Nash behaviour and lump sum transfer among jurisdictions.

Suggested Citation

  • Amedeo Fossati & Marcello Montefiori, 2010. "Nash behaviour and public good," Economics Bulletin, AccessEcon, vol. 30(4), pages 3161-3169.
  • Handle: RePEc:ebl:ecbull:eb-10-00648

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Battalio, Raymond C & Kagel, John H & Kogut, Carl A, 1991. "Experimental Confirmation of the Existence of a Giffen Good," American Economic Review, American Economic Association, vol. 81(4), pages 961-970, September.
    Full references (including those not matched with items on IDEAS)

    More about this item


    public good; Nash equilibrium; lump sum transfer;

    JEL classification:

    • H4 - Public Economics - - Publicly Provided Goods
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ebl:ecbull:eb-10-00648. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (John P. Conley). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.