Asymmetric impacts and over-provision of public goods

Louis-Gaëtan Giraudet () and Céline Guivarch
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Louis-Gaëtan Giraudet: CIRED - centre international de recherche sur l'environnement et le développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique

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Abstract: We elicit simple conditions for an old puzzle -- over-provision of a public good. An asymmetric public good that benefits some contributors while harming others is subject to both free riding and free driving. Even though aggregate impacts are net positive, it can be over-provided if free drivers face provision costs that are sufficiently lower than free riders'. Asymmetric impacts further impose restrictions on Hicks-Kaldor improvements. We establish these results in a parsimonious model that can easily be applied to a variety of so-called NIMBY problems, for instance new public infrastructures and global warming mitigation.

Keywords: public good; externalities; free riding; free driving; NIMBY; global warming (search for similar items in EconPapers)
Date: 2018-12-19
New Economics Papers: this item is included in nep-pub
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Working Paper: Asymmetric impacts and over-provision of public goods (2018)
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