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On Allocation Contests for Publicly Provided Goods

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  • Arijit Sen

Abstract

In many countries, the government provides goods and services that are rival in consumption—essential commodities, such as water, public transportation and basic health care, and merit goods like professional education and tertiary health care. For such goods, the government has to specify allocation rules under which citizens can access them. Affluent citizens often have the incentive and the ability to influence public allocation rules by engaging in allocation contests. This article presents simple models of allocation contests for a divisible essential commodity and an indivisible merit good, and studies contest equilibria and their implications for social outcomes. Given allocation contests over public provision, falling public supply of an essential commodity can have magnified negative impact on social welfare, and raising the reservation quota of a publicly provided merit good for a set of disadvantaged citizens might effectively lower their access to the good. JEL: C72, D61, H42

Suggested Citation

  • Arijit Sen, 2018. "On Allocation Contests for Publicly Provided Goods," South Asian Journal of Macroeconomics and Public Finance, , vol. 7(1), pages 1-16, June.
    • Handle: RePEc:sae:smppub:v:7:y:2018:i:1:p:1-16
    DOI: 10.1177/2277978718760445
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    References listed on IDEAS

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    More about this item

    Keywords

    Publicly provided goods; rival goods; merit goods; allocation contests;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods

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