Pure Public Goods versus Commons: Benefit-Cost Duality
This paper utilizes benefit-cost duality to differentiate the problems associated with a pure public good from the problems associated with a commons. For the public good scenario, contributors’ benefits are public or available to all, while provision costs impact only the contributor. In a commons, crowding costs are public, while benefits affect only the user. Although both problems possess the same game form for their canonical representations, collective-action implications differ: for example, the relative positions of the Nash equilibrium and Pareto optimum, the form of the exploitation hypothesis, and the need for selective incentives or punishments.
References listed on IDEAS
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- Cornes, Richard & Hartley, Roger & Sandler, Todd, 1999.
" Equilibrium Existence and Uniqueness in Public Good Models: An Elementary Proof via Contraction,"
Journal of Public Economic Theory,
Association for Public Economic Theory, vol. 1(4), pages 499-509.
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