Optimal Provision of Multiple Excludable Public Goods

Hanming Fang () and Peter Norman ()

No 1441R, Cowles Foundation Discussion Papers from Cowles Foundation, Yale University

Abstract: This paper studies the optimal provision mechanism for multiple excludable public goods when agents' valuations are private information. For a parametric class of problems with binary valuations, we characterize the optimal mechanism, and show that it involves bundling. Bundling alleviates the free riding problem in large economies in two ways: first, it can increase the asymptotic provision probability of socially efficient public goods from zero to one; second, it decreases the extent of use exclusions.

Keywords: Public Goods Provision; Bundling; Exclusion (search for similar items in EconPapers)
JEL-codes: H41 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mic, nep-pbe and nep-pub
Date: 2003-10, Revised 2006-04
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Related works:
Working Paper: Optimal Provision of Multiple Excludable Public Goods (2008)
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