An Efficiency Rationale for the Bundling of Public Goods

Peter Norman () and Hanming Fang ()

No 458, Econometric Society 2004 North American Summer Meetings from Econometric Society

Abstract: This paper studies the role of bundling in the efficient provision of excludable public goods. We show that bundling in the provision of unrelated public goods can enhance social welfare. With a large number of goods and agents, first best can be approximated with pure bundling. For a parametric class of problems with binary valuations, we characterize the optimal mechanism, and show that bundling alleviates the free riding problem in large economies and decreases the extent of use exclusions. Both results are related to the idea that bundling makes it possible to reduce the incidence of exclusions because the variance in the relevant valuations decreases

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-pbe
Date: 2004-08-11
View citations in EconPapers

Downloads: (external link)
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=445863 main text (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:ecm:nasm04:458

Access Statistics for this paper

More papers in Econometric Society 2004 North American Summer Meetings from Econometric Society
Contact information at EDIRC.
Series data maintained by Christopher F. Baum ().