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Existence and Warr Neutrality for Matching Equilibria in a Public Good Economy: An Aggregative Game Approach

  • Wolfgang Buchholz
  • Richard Cornes
  • Dirk T. G. Rübbelke

Using the aggregative game approach as developed by Cornes and Hartley (2003, 2007) this paper analyzes the conditions under which matching mechanisms in a public good economy lead to interior matching equilibria in which all agents make strictly positive flat contributions to the public good. In particular we show that the distribution of income among the agents is a crucial determinant for the existence of interior matching equilibria. In addition, we explore which matching mechanisms show Warr neutrality and how the size of the economy affects the possibility of implementing a certain type of Pareto optimal solutions through matching.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2009/wp-cesifo-2009-12/cesifo1_wp2884.pdf
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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 2884.

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Date of creation: 2009
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Handle: RePEc:ces:ceswps:_2884
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  1. Cornes, Richard & Sandler, Todd, 1985. "The Simple Analytics of Pure Public Good Provision," Economica, London School of Economics and Political Science, vol. 52(205), pages 103-16, February.
  2. Roberts, Russell D, 1987. "Financing Public Goods," Journal of Political Economy, University of Chicago Press, vol. 95(2), pages 420-37, April.
  3. Richard Cornes & Roger Hartley, 2007. "Aggregative Public Good Games," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 9(2), pages 201-219, 04.
  4. Guttman, Joel M, 1978. "Understanding Collective Action: Matching Behavior," American Economic Review, American Economic Association, vol. 68(2), pages 251-55, May.
  5. Falkinger, Josef, 1996. "Efficient private provision of public goods by rewarding deviations from average," Journal of Public Economics, Elsevier, vol. 62(3), pages 413-422, November.
  6. Matthew J. Kotchen, 2009. "Voluntary Provision of Public Goods for Bads: A Theory of Environmental Offsets," Economic Journal, Royal Economic Society, vol. 119(537), pages 883-899, 04.
  7. Robin Boadway & Pierre Pestieau & David Wildasin, 1987. "Tax-Transfer Policies and the Voluntary Provision of Public Goods," Working Papers 682, Queen's University, Department of Economics.
  8. Warr, Peter G., 1982. "Pareto optimal redistribution and private charity," Journal of Public Economics, Elsevier, vol. 19(1), pages 131-138, October.
  9. Georg KIRCHSTEIGER & Clemens PUPPE, 1996. "On the Possibility of Efficient Private Provision of Public Goods through Government Subsidies," Vienna Economics Papers vie9608, University of Vienna, Department of Economics.
  10. Cornes, Richard & Hartley, Roger, 2003. " Risk Aversion, Heterogeneity and Contests," Public Choice, Springer, vol. 117(1-2), pages 1-25, October.
  11. Althammer, Wilhelm & Buchholz, Wolfgang, 1993. "Lindahl-equilibria as the outcome of a non-cooperative game : A reconsideration," European Journal of Political Economy, Elsevier, vol. 9(3), pages 399-405, August.
  12. Bergstrom, Theodore & Blume, Lawrence & Varian, Hal, 1986. "On the private provision of public goods," Journal of Public Economics, Elsevier, vol. 29(1), pages 25-49, February.
  13. Andreoni, J. & Bergstrom, T., 1992. "Do Government Subsidies Increase the Private Supply of Public Goods," Papers 92-11, Michigan - Center for Research on Economic & Social Theory.
  14. repec:cup:cbooks:9780521477185 is not listed on IDEAS
  15. Boadway, Robin & Song, Zhen & Tremblay, Jean-Francois, 2007. "Commitment and matching contributions to public goods," Journal of Public Economics, Elsevier, vol. 91(9), pages 1664-1683, September.
  16. Josef Falkinger & Johann K. Brunner, 1999. "Taxation in an economy with private provision of public goods," Review of Economic Design, Springer, vol. 4(4), pages 357-379.
  17. Danziger, Leif & Schnytzer, Adi, 1991. "Implementing the Lindahl voluntary-exchange mechanism," European Journal of Political Economy, Elsevier, vol. 7(1), pages 55-64, April.
  18. Wolfgang Buchholz & Richard Cornes & Wolfgang Peters, 2003. "On the Frequency of Interior Cournot-Nash Equilibria in a Public Good Economy," CESifo Working Paper Series 982, CESifo Group Munich.
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