Pure Public Goods versus Commons: Benefit-Cost Duality

Todd Sandler and Daniel Arce

Land Economics, 2003, vol. 79, issue 3, 355-368

Abstract: This paper utilizes benefit-cost duality to differentiate the problems associated with a pure public good from the problems associated with a commons. For the public good scenario, contributors’ benefits are public or available to all, while provision costs impact only the contributor. In a commons, crowding costs are public, while benefits affect only the user. Although both problems possess the same game form for their canonical representations, collective-action implications differ: for example, the relative positions of the Nash equilibrium and Pareto optimum, the form of the exploitation hypothesis, and the need for selective incentives or punishments.

JEL-codes: D70 H41 (search for similar items in EconPapers)
Date: 2003
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Citations: View citations in EconPapers (17)

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