The Provision of Collective Goods Through a Social Division of Labour

Robert P. Gilles (), Marialaura Pesce and Dimitrios Diamantaras
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Robert P. Gilles: Economics Group, Queen’s University Management School

CSEF Working Papers from Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy

Abstract: This paper develops a general equilibrium framework in which collective goods are provided by specialised professionals as part of an endogenously emerging social division of labour. It merges an economy with collective goods with the model of a private-goods market economy with an endogenously emerging social division of labour. Our approach is founded on the notion of a consumer-producer who endogenously select a profession, thereby inducing an endogenous social division of labour. Natural applications are the presence of non-tradables in production, the effects of education on productive abilities, and the market system itself as an implementation of the price mechanism. For an appropriately generalised notion of valuation equilibrium, we prove the two fundamental theorems of welfare economics under very general conditions, notably allowing for incomplete, non-monotonic, and non-transitive preferences. We also incorporate Adam Smith's principle of increasing returns to specialisation and investigate its effects on equilibrium prices.

Keywords: Social division of labour; Consumer-producer; collective goods; Pareto optimality; Valuation equilibrium; Lindahl equilibrium. (search for similar items in EconPapers)
JEL-codes: D41 D51 (search for similar items in EconPapers)
Date: 2017-03-28, Revised 2019-04-08
New Economics Papers: this item is included in nep-ene and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Journal Article: The provision of collective goods through a social division of labour (2020)
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