文档介绍：Lecture 15: public goods and externality
Content
Public goods
Subscription
Efficient provision of public goods
Public choice
Externality
What’s externality?
How to solute it?
What’s the efficient condition with externality.
Public goods
Subscription
Excludable
Non-excludable
Rival
Private goods
Regulated goods(?)
Non-rival
Club goods
Public goods
Public goods
Subscription
Excludability is the property problem
Rivality is the physical problem.
(1989), Public domain
Price determined by the property.
Public goods
Efficient provision of public goods
Discrete case:
xi : private goods
G: public goods
gi: i’s contribution to public goods
ui(G,xi), utility function
Public goods
Discrete case: benchmark
If providing the public goods will Pareto dominate non. So
ri: the reservation price of i.
Public goods
Then will get:
The sum of reservation price exceeds the cost of public goods, it’s efficient to provide the public goods.
Public goods
But, can private provide it?
Reflection function:
If:
Non cooperation equilibrium (0,0)
Public goods
Voting:
Public goods
Continuous case:
Social welfare function: