Bargaining Over Public Goods

Julio Davila, Jan Eeckhout () and Cesar Martinelli ()
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Jan Eeckhout: Department of Economics, University of Pennsylvania

No 901, Working Papers from Centro de Investigacion Economica, ITAM

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.

New Economics Papers: this item is included in nep-gth, nep-pbe and nep-pub
Date: 2009-01
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Related works:
Working Paper: Bargaining over public goods (2008)
Working Paper: Bargaining over public goods (2008)
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Persistent link: http://EconPapers.repec.org/RePEc:cie:wpaper:0901

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