On the private provision of public goods

We consider a general model of the non-cooperative provision of a public good. Under very weak assumptions there will always exist a unique Nash equilibrium in our model. A small redistribution of wealth among the contributing consumers will not change the equilibrium amount of the public good. Howe...

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Bibliographic Details
Published in:Journal of public economics 1986-02, Vol.29 (1), p.25-49
Main Authors: Bergstrom, Theodore, Blume, Lawrence, Varian, Hal
Format: Article
Language:English
Subjects:
Donations
Economic models
Economic theory
Equilibrium
Mathematical models
Private
Public good
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Summary:We consider a general model of the non-cooperative provision of a public good. Under very weak assumptions there will always exist a unique Nash equilibrium in our model. A small redistribution of wealth among the contributing consumers will not change the equilibrium amount of the public good. However, larger redistributions of wealth will change the set of contributors and thereby change the equilibrium provision of the public good. We are able to characterize the properties and the comparative statics of the equilibrium in a quite complete way and to analyze the extent to which government provision of a public good ‘crowds out’ private contributions.
ISSN:0047-2727
1879-2316
DOI:10.1016/0047-2727(86)90024-1