Bargaining over public goods

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

Documents de travail du Centre d'Economie de la Sorbonne from Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne

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.

Keywords: Public goods; bargaining; alternating offers. (search for similar items in EconPapers)
JEL-codes: C78 H41 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-gth, nep-pbe and nep-pub
Date: 2008-06

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ftp://mse.univ-paris1.fr/pub/mse/CES2008/B08041.pdf (application/pdf)

Related works:
Working Paper: Bargaining Over Public Goods (2009)
Working Paper: Bargaining over public goods (2008)
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Persistent link: http://EconPapers.repec.org/RePEc:mse:cesdoc:b08041

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