Public Goods with Congestion: A Mechanism Design Approach

Oleksii Birulin

No 139, 2004 Meeting Papers from Society for Economic Dynamics

Abstract: I consider the problem of the efficient provision of a public good with congestion in a setting with asymmetric information. I show, in particular, that when congestion is taken into account, in a wide class of economies it is possible to construct an incentive compatible mechanism that always produces the good at the efficient level, balances the budget and satisfies voluntary participation constraints. This result is in contrast with the corresponding impossibility result for pure public goods due to Mailath and Postlewaite (1990) and Rob (1989)

Keywords: public goods; congestion; efficiency; budget balance; voluntary participation (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 and nep-ure
Date: 2004
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