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Asymmetric impacts and over-provision of public goods

Louis-Gaëtan Giraudet and Céline Guivarch

CIRED Working Papers from HAL

Abstract: We elicit simple conditions for an old puzzle -- over-provision of a public good. An asymmetric public good that benefits some contributors while harming others is subject to both free riding and free driving. Even though aggregate impacts are net positive, it can be over-provided if free drivers face provision costs that are sufficiently lower than free riders'. Asymmetric impacts further impose restrictions on Hicks-Kaldor improvements. We establish these results in a parsimonious model that can easily be applied to a variety of so-called NIMBY problems, for instance new public infrastructures and global warming mitigation.

Keywords: NIMBY; free driving; public good; externalities; free riding; global warming (search for similar items in EconPapers)
Date: 2018-12-19
New Economics Papers: this item is included in nep-env
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