The Unique Informational Effciency of the Lindahl Allocation Process in Economies with Public Goods

Guoqiang Tian

MPRA Paper from University Library of Munich, Germany

Abstract: This paper investigates the informational requirements of resource allocation processes in public goods economies with any number of firms and commodities. We show that the Lindahl mechanism is informationally effcient in the sense that it uses the smallest message space among smooth resource allocation processes that are informationally decentralized and realize Pareto optimal allocations over the class of public goods economies where Lindahl equilibria exist. Furthermore, we show that the Lindahl mechanism is the unique informationally effcient decentralized mechanism that realizes Pareto effcient and individually rational allocations in public goods economies with Cobb-Douglas utility functions and quadratic production functions.

Keywords: Informational Effciency; Lindahl Allocation Process; Public Goods (search for similar items in EconPapers)
JEL-codes: D5 D61 D71 D83 P51 (search for similar items in EconPapers)
Date: 2001, Revised 2005-10
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:41229

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