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The Optimal Provision of Information and Communication Technologies in Smart Cities

Author

Listed:
  • Batabyal, Amitrajeet
  • Beladi, Hamid

Abstract

We exploit the public good attributes of information and communication technologies (ICTs) and theoretically analyze an aggregate economy of two smart cities in which ICTs are provided in either a decentralized or a centralized manner. We first determine the efficient ICT levels that maximize the aggregate surplus from the provision of ICTs in the two cities. Second, we compute the optimal level of ICT provision in the two cities in a decentralized regime in which spending on the ICTs is financed by a uniform tax on the city residents. Third, we ascertain the optimal level of ICT provision in the two cities in a centralized regime subject to equal provision of ICTs and cost sharing. Fourth, we show that if the two cities have the same preference for ICTs then centralization is preferable to decentralization as long as there is a spillover from the provision of ICTs. Finally, we show that if the two cities have dissimilar preferences for ICTs then centralization is preferable to decentralization as long as the spillover exceeds a certain threshold.

Suggested Citation

  • Batabyal, Amitrajeet & Beladi, Hamid, 2019. "The Optimal Provision of Information and Communication Technologies in Smart Cities," MPRA Paper 95451, University Library of Munich, Germany, revised 17 Jul 2019.
  • Handle: RePEc:pra:mprapa:95451
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    File URL: https://mpra.ub.uni-muenchen.de/95451/1/MPRA_paper_95451.pdf
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    References listed on IDEAS

    as
    1. Tuba Bakıcı & Esteve Almirall & Jonathan Wareham, 2013. "A Smart City Initiative: the Case of Barcelona," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 4(2), pages 135-148, June.
    2. Baron, Justus & Ménière, Yann & Pohlmann, Tim, 2014. "Standards, consortia, and innovation," International Journal of Industrial Organization, Elsevier, vol. 36(C), pages 22-35.
    3. Alois Paulin, 2016. "Informating Smart Cities Governance? Let Us First Understand the Atoms!," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 7(2), pages 329-343, June.
    4. Reza Oladi, 2004. "Strategic quotas on foreign investment and migration," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 24(2), pages 289-306, August.
    5. Jean-Marc Coicaud, 2016. "Administering and Governing with Technology: The Question of Information Communication Technology and E-Governance," Global Policy, London School of Economics and Political Science, vol. 7(2), pages 296-300, May.
    6. repec:eee:soceps:v:58:y:2017:i:c:p:13-21 is not listed on IDEAS
    7. Rodrigo Firmino & Fabio Duarte, 2016. "Private video monitoring of public spaces: The construction of new invisible territories," Urban Studies, Urban Studies Journal Limited, vol. 53(4), pages 741-754, March.
    8. repec:eee:retrec:v:65:y:2017:i:c:p:24-33 is not listed on IDEAS
    9. Grazia Concilio & Luciano Bonis & Jesse Marsh & Ferdinando Trapani, 2013. "Urban Smartness: Perspectives Arising in the Periphéria Project," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 4(2), pages 205-216, June.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Information and Communication Technologies; Smart City; Spillover; Uncertainty;

    JEL classification:

    • H76 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Other Expenditure Categories
    • R50 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - General
    • R53 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Public Facility Location Analysis; Public Investment and Capital Stock

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