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Bargaining over public goods

Author

Listed:
  • Julio Davila

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Jan Eeckhout

    (University of Pennsylvania [Philadelphia])

  • César Martinelli

    (Centro de Investigacion Economica - Instituto Tecnologico Autonomo)

Abstract

In a simple public good economy, we propose a natural bargaining procedure whose equilibria converge to Lindahl allocations as the cost of bargaining vanishes. The procedure splits the decision over the allocation in a decision about personalized prices and a decision about output levels for the public good. Since this procedure does not assume price-taking behavior, it provides a strategic foundation for the personalized taxes inherent to the Lindahl solution to the public goods problem.

Suggested Citation

  • Julio Davila & Jan Eeckhout & César Martinelli, 2008. "Bargaining over public goods," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00289435, HAL.
    • Handle: RePEc:hal:cesptp:halshs-00289435
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00289435v1
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    2. Marina Azzimonti & Laura Karpuska & Gabriel Mihalache, 2023. "Bargaining Over Taxes And Entitlements In The Era Of Unequal Growth," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 64(3), pages 893-941, August.
    3. Anne van den Nouweland & Agnieszka Rusinowska, 2020. "Bargaining foundation for ratio equilibrium in public‐good economies," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 22(2), pages 302-319, April.
    4. Matthew Elliott & Benjamin Golub, 2019. "A Network Approach to Public Goods," Journal of Political Economy, University of Chicago Press, vol. 127(2), pages 730-776.
    5. Wolfgang Buchholz & Richard Cornes & Dirk Rübbelke, 2020. "Matching in the Kolm triangle: interiority and participation constraints of matching equilibria," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 47(5), pages 1039-1050, April.
    6. Dijkstra, Bouwe R. & Nentjes, Andries, 2020. "Pareto-Efficient Solutions for Shared Public Good Provision: Nash Bargaining versus Exchange-Matching-Lindahl," Resource and Energy Economics, Elsevier, vol. 61(C).

    More about this item

    Keywords

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    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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