An Efficiency Rationale for the Bundling of Public Goods

Peter Norman () and Hanming Fang

No 458, Econometric Society 2004 North American Summer Meetings from Econometric Society

Abstract: This paper studies the role of bundling in the efficient provision of excludable public goods. We show that bundling in the provision of unrelated public goods can enhance social welfare. With a large number of goods and agents, first best can be approximated with pure bundling. For a parametric class of problems with binary valuations, we characterize the optimal mechanism, and show that bundling alleviates the free riding problem in large economies and decreases the extent of use exclusions. Both results are related to the idea that bundling makes it possible to reduce the incidence of exclusions because the variance in the relevant valuations decreases

Keywords: Public goods provision; bundling; exclusion (search for similar items in EconPapers)
JEL-codes: H41 (search for similar items in EconPapers)
Date: 2004-08-11
New Economics Papers: this item is included in nep-pbe
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Citations: View citations in EconPapers (2)

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Related works:
Working Paper: An Efficiency Rational for Bundling of Public Goods (2004)
Working Paper: An efficiency rationale for bundling of public goods (2003)
Working Paper: An Efficiency Rationale for Bundling of Public Goods (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:ecm:nasm04:458

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