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Nash-Cournot or Lindahl Behavior?: An Empirical Test for the NATO Allies


  • Todd Sandler
  • James C. Murdoch


This paper derives systems of demand equations for distinguishing between Nash-Cournot and Lindahl behavior in a group that either shares a pure public good or an activity that provides a private and a pure public joint product. Systems of simultaneous equations are estimated based upon Nash-Cournot and Lindahl behavior for a sample of ten NATO allies for the 1956–1987 period. Nonnested hypothesis tests support the Nash-Cournot specification for five of the ten sample allies. No evidence of Lindahl behavior is found. The Nash-Cournot joint-product specification outperforms the pure public model for all sample allies.

Suggested Citation

  • Todd Sandler & James C. Murdoch, 1990. "Nash-Cournot or Lindahl Behavior?: An Empirical Test for the NATO Allies," The Quarterly Journal of Economics, Oxford University Press, vol. 105(4), pages 875-894.
  • Handle: RePEc:oup:qjecon:v:105:y:1990:i:4:p:875-894.

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