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Bargaining over Public Goods

Author

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  • Julio Davila

    () (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, CORE - Center of Operation Research and Econometrics [Louvain] - UCL - Université Catholique de Louvain, PSE - Paris School of Economics)

  • Jan Eeckhout

    (Universitat Pompeu Fabra [Barcelona], Department of Economics - UCL - University College of London [London])

  • C. Martinelli

    (ITAM - Instituto Tecnológico Autónomo de México)

Abstract

In a simple public good economy, we propose a natural bar- gaining procedure, the equilibria of which converge to Lin- dahl allocations as the cost of bargaining vanishes. The pro- cedure 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 in the Lindahl solution to the public goods problem.

Suggested Citation

  • Julio Davila & Jan Eeckhout & C. Martinelli, 2009. "Bargaining over Public Goods," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00633592, HAL.
  • Handle: RePEc:hal:cesptp:halshs-00633592
    DOI: 10.1111/j.1467-9779.2009.01438.x
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00633592
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    References listed on IDEAS

    as
    1. Groves, Theodore & Ledyard, John O, 1977. "Optimal Allocation of Public Goods: A Solution to the "Free Rider" Problem," Econometrica, Econometric Society, vol. 45(4), pages 783-809, May.
    2. Rubinstein, Ariel, 1982. "Perfect Equilibrium in a Bargaining Model," Econometrica, Econometric Society, vol. 50(1), pages 97-109, January.
    3. repec:cup:apsrev:v:83:y:1989:i:04:p:1181-1206_08 is not listed on IDEAS
    4. Dávila, J. & Eeckhout, J., 2008. "Competitive bargaining equilibrium," Journal of Economic Theory, Elsevier, vol. 139(1), pages 269-294, March.
    5. Thomson, William, 1999. " Economies with Public Goods: An Elementary Geometric Exposition," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 1(1), pages 139-176.
    6. Harrington, Joseph Jr., 1989. "The advantageous nature of risk aversion in a three-player bargaining game where acceptance of a proposal requires a simple majority," Economics Letters, Elsevier, vol. 30(3), pages 195-200, September.
    7. Banks, Jeffrey s. & Duggan, John, 2000. "A Bargaining Model of Collective Choice," American Political Science Review, Cambridge University Press, vol. 94(01), pages 73-88, March.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Anne Van den Nouweland & Agnieszka Rusinowska, 2018. "Bargaining Foundation for Ratio Equilibrium in Public Good Economies," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-01720001, HAL.
    2. Anne van den Nouweland & Agnieszka Rusinowka, 2018. "Bargaining Foundation for Ratio Equilibrium in Public Good Economies," Documents de travail du Centre d'Economie de la Sorbonne 18004, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.

    More about this item

    Keywords

    public goods; alternating offers bargaining;

    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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