Matching as a Cure for Underprovision of Voluntary Public Good Supply: Analysis and an Example

Wolfgang Buchholz (), Richard Cornes and Dirk Rübbelke

ANU Working Papers in Economics and Econometrics from Australian National University, College of Business and Economics, School of Economics

Abstract: Matching mechanisms are regarded as an important instrument to bring about Pareto optimal allocations in a public good economy and to cure the underprovision problem associated with private provision of public goods. The desired Pareto optimal interior match-ing equilibrium, however, emerges only under very special conditions. But we show in this note that corner solutions, in which some agents choose zero flat contributions, normally avoid underprovision and illustrate and interpret our results by a simple numerical example.

JEL-codes: C78 H41 (search for similar items in EconPapers)
Pages: 17 Pages
Date: 2011-03
New Economics Papers: this item is included in nep-gth
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Working Paper: Matching as a Cure for Underprovision of Voluntary Public Good Supply: Analysis and an Example (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:acb:cbeeco:2011-541

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