One-Sided Private Provision of Public Goods with Implicit Lindahl Pricing

Volker Meier ()

No 3295, CESifo Working Paper Series from CESifo Group Munich

Abstract: We consider a sequential game in which one player produces a public good and the other player can influence this decision by making an unconditional transfer. An efficient allocation requires the Lindahl property: the sum of the two (implicit) individual prices has to be equal to the resource cost of the public good. Under mild conditions this requires a personal price for the providing player that lies below half of the resource cost. These results can, for example, justify high marginal taxes on wages of secondary earners.

Keywords: Lindahl pricing; noncooperative games; private provision of public goods; Stackelberg equilibrium (search for similar items in EconPapers)
JEL-codes: C72 D61 H21 H41 (search for similar items in EconPapers)
Date: 2010
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