Trading equilibrium in a public good economy with smooth preferences and a mixed measure space of consumers

Hovav Perets, Benyamin Shitovitz and Menahem Spiegel

Journal of Mathematical Economics, 2012, vol. 48, issue 3, 163-169

Abstract: Lindahl and Nash equilibria are often used in the theory of public good. Shitovitz and Spiegel (1998) present an example of 2-person economy with one private good and one pure public good, where the core efficient Lindahl allocation does not Pareto dominate the (inefficient) Nash allocation. In this paper we introduce the new concept of Trading equilibrium for a general public good economy with smooth preferences and a mixed measure space of consumers. We obtain that this economy admits a unique Trading equilibrium. Moreover, the Trading equilibrium induces a core allocation that strictly Pareto dominates the Nash allocation.

Keywords: Public good; Private provision of public good; Nash equilibrium; Mixed measure space of consumers (search for similar items in EconPapers)
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:eee:mateco:v:48:y:2012:i:3:p:163-169

DOI: 10.1016/j.jmateco.2012.02.001

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