Bargaining over Public Goods

Journal article: In a simple public good economy, we propose a natural bar- gaining procedure, the equilibria of which converge to Lin- dahl allocations as the cost of bargaining vanishes. The pro- cedure splits the decision over the allocation in a decision about personalized prices and a decision about output levels for the public good. Since this procedure does not assume price-taking behavior, it provides a strategic foundation for the personalized taxes inherent in the Lindahl solution to the public goods problem.

Author(s)

Julio Davila, Jan Eeckhout, C. Martinelli

Journal
  • Journal of Public Economic Theory
Date of publication
  • 2009
Keywords
  • Public goods
  • Alternating offers bargaining
Pages
  • 927-945
Version
  • 1
Volume
  • 11