surplus from publicness in consumption and its equitable distribution abstract the application of distributive equity has been confined to the allocation of private goods this paper extends this application to economies with public goods after the surplus accruing from publicness in consumption of public goods is defined and quantified we show 1 there exists an efficient allocation such that the surplus from publicness as well as all of the resources available are equitably distributed 2 the surplus from publicness fails to be equitably distributed in lindahl equilibria and in the core even if the economy starts from an equal distribution of endowments 3 a certain income redistribution policy should be undertaken to equitably distribute the surplus from publicness

efficient egalitarian equivalence and the core of an economy with public projects abstract we prove the existence of efficient egalitarian equivalent allocations in an economy with a finite number of private goods and one abstract public project that can be executed by certain coalitions of economic agents efficient egalitarian equivalent allocations however may not be in the core

a note on cost share equilibrium and owner consumers the contributions of j farrell econ letters 19 1985 303 306 and a mas colell and j silvestre j econ theory 47 1989 239 256 have studied the implications of two unanimity principles when a firm is owned by the consumers interestingly both approaches lead to what j e roemer and j silvestre the proportional solution for economies with both public and private ownership mimeo university of california davis 1991 call proportional allocations we compare these approaches and analyze how well they serve as equilibrium foundations for proportional allocations in a nutshell the conclusion is that farrell s unanimity principle is simpler than mas colell and silvestre s but assuming that the cost function is convex the latter always works i e equilibrium exists and yields proportional allocations while the former may not equilibrium may not exist in other words proportional allocations may not be supportable as equilibria

wicksell lindahl and the theory of public goods wicksell s and lindahl s ideas on public goods and decisions are reviewed in light of later developments in the theoretical economics literature i begin by discussing their normative ideals in particular the notion of justness and the sources of the difficulties in reaching them wicksell s and lindahl s ideal states as well as the obstacles that they perceive are compared to more recent views on free riding and on the behavior of elected representatives their views on political bargaining are then related to later concepts in particular to the core of the economy

technology adoption education and immigration policy abstract this paper explores a two period model with complementarities between investment in adoption of new technologies and human capital accumulation investment in education workers invest in education in the first period and in the second period entrepreneurs decide whether or not to adopt a new technology multiple rational expectation equilibria exist if workers believe that a large small fraction of entrepreneurs will adopt the new technology next period then their return to education will be high low and accordingly the level of investment in education will be high low too equivalently entrepreneurs will adopt the new technology if the level of education is sufficiently high two policies are considered for ensuring that a welfare improving high technology equilibrium will prevail namely educational subsidies and immigration of high skilled workers a key result is that a commitment to immigration of high skilled is sufficient to ensure new technology adoption

transfers to sustain dynamic core theoretic cooperation in international stock pollutant control international environmental agreements aiming at correcting negative externalities generated by transboundary pollution are difficult to achieve for many reasons important obstacles arise from asymmetry in costs and benefits and instability may occur due to the fact that coalitions of countries may attempt to do better for themselves outside of any proposed agreement in a static context it has already been shown that it is possible to achieve stability in the sense of the core of a co operative game by means of appropriately defined transfers between the countries involved however the transboundary pollution problems that are most important are caused by accumulated pollutants so that a dynamic analysis is required this paper provides a transfer scheme that yields a core property in a dynamic context the possibility of computing such transfers numerically is discussed

household cost functions and equivalence scales we describe a simple method to estimate household cost functions and family equivalence scales it is an alternative to standard methods as it does not assume strong postulates about utility maximization nor any functionally specified model equations the data requirements are extremely modest we assume interpersonal ordinal comparability in the sense of sen 1976 and use empirical evidence for eight european countries and the u s to show the feasibility of the method and the stability of its results we also show that subjective data like those provided by income evaluation questions may be used without adopting a cardinal utility framework

dynamic implementation in two agent economies abstract the dynamic mechanisms that implement pareto efficient and individually rational allocations in standard public good economies suppose that agents communicate by exchanging as messages their marginal rates of substitution in some familiar models such as economies with non monotonic preferences marginal rates of substitution are not well defined or do not characterize preferences and therefore cannot play the role of communication messages we define a dynamic mechanism that implements pareto efficient and individually rational allocations in a general two agent economy

changes in the perception of the poverty line during the depression in russia 1993 96 economic transition in russia was accompanied by a precipitous decline in real income for most of the population this article analyzes how the decline affected people s perception of the minimum level of income needed to make ends meet individual level data collected from repeated surveys between march 1993 and september 1996 reveal that the elasticity of subjective minimum income with respect to actual median income was 1 5 or that people s subjective estimate of the minimum income for an adult russian fell about 1 7 percent each month this sharp reduction in the face of a decrease in real income meant that the percentage of the population who felt that they were poor declined even though poverty remained at a very high level more than 60 percent of the population throughout the period this self perception is in marked contrast to an objective measure of poverty the percentage of the population whose income was less than a given real poverty line rose

game theoretic modeling of increasing returns to scale abstract this paper surveys the analysis by means of cooperative game theory of economies in which there are increasing returns to scale in the first section necessary and sufficient conditions for the existence of a core of a general equilibrium economy are considered in the second section the partial equilibrium approach to increasing returns production which developed along with the natural monopoly literature is surveyed the close relationship between the general equilibrium and partial equilibrium approaches is emphasized

robustness of subjective welfare analysis in a poor developing country madagascar 2001 the authors analyze the subjective perceptions of poverty in madagascar in 2001 and their relationship to objective poverty indicators they base their analysis on survey responses to a series of subjective perception questions the authors extend the existing empirical methodology for estimating subjective poverty lines on the basis of categorical consumption adequacy questions based on this methodology they calculate the household specific subjective poverty lines and compare the poverty profiles derived from different subjective welfare questions the results show that the aggregate poverty measures derived from consumption adequacy questions accord quite well with the poverty measures based on objective poverty lines the subjective welfare analysis can be used in poor developing countries for evaluating socioeconomic and distributional impacts of various policy interventions

efficiency with non convexities extending the scandinavian consensus approaches there are two distinct scandinavian consensus approaches to public good supply both based on agents willingness to pay a wicksell foley public competitive equilibrium arises from a negative consensus in which no change of public environment together with associated taxes and subsidies which finance it will be unanimously approved alternatively in a lindahl or valuation equilibrium charges for the public environment induce a positive consensus to allow general non convexities to be regarded as aspects of the public environment we extend recent generalizations of these equilibrium notions and prove counterparts to both the usual fundamental efficiency theorems of welfare economics

revisiting the classical view of benefit based taxation this paper explores how the persistently popular classical logic of bene t based taxation in which an individual s bene t from public goods is tied to his or her income earning ability can be incorporated into modern optimal tax theory if lindahl s methods are applied to that view of bene ts rst best optimal policy can be characterized analytically as depending on a few potentially estimable statistics in particular the coe cient of complementarity between public goods and innate talent constrained optimal policy with a pareto e cient objective that strikes a balance controlled by a single parameter between this principle and the familiar utilitarian criterion can be simulated using conventional constraints and methods a wide range of optimal policy outcomes can result including those that match well several features of existing policies to the extent that such an objective re ects the mixed normative reasoning behind prevailing

a simple stochastic adjustment process in this note we present a stochastic adjustment process which has nice optimality and probablistic dynamic stability properties for a large class of economic environments in addition the process relies on a strikingly simple information exchange procedure at each iteration it can also be termed as strongly locally individually incentive compatible 2 in that each consumer agent has no incentive to lie about his preferences provided he is concerned only with maximization of one step expected utility gain at each iteration the obvious source of inspiration for this process is the stochastic decentralized resource allocation mechanism the b process by hurwicz radner and reiter 2 indeed it should be regarded as the latter s informationally simplified descendent for general background information on resource allocation mechanisms and motivations for designing such mechanisms see hurwicz radner and reiter 2 and hahn 1 in order to simplify the exposition we present the process only for the case of pure exchange economies with possible consumption externalities for more general cases see mitsui 4 mitsui 4 also constructs a core convergent version of the process

the equivalence of core and cost share equilibria in an economy with a public good abstract the central result of this paper is a refinement of an equivalence theorem in mas collell quart j econ 94 1980 625 641 for the core of a finite economy with a public good it is shown that an allocation belongs to the core if and only if it is a cost share equilibrium i e is supported by a monotonic cost share system we also characterize the set of core allocations which can be supported by a linear cost share system it turns out that the set of linear cost share equilibria which are in one to one correspondence with the lindahl foley equilibria is determined by uniform upper and lower bounds on the relative marginal rate of substitution for the public good

the acid rain differential game this paper considers an acid rain differential game countries emit sulphur which is partly transferred to other countries depositions above critical loads ultimately destroy the soil countries face a trade off between the costs of emission reductions and the damage to the soil due to the depletion of the acid buffers because of the transboundary externalities the outcome will depend on whether the countries cooperate or not this paper presents the cooperative outcome and the open loop and markov perfect nash equilibria of the acid rain differential game it will be shown that the depositions always converge to the critical loads but the steady state levels of the buffer stocks differ the theory is used to analyse the acid rain differential game for sulphur between great britain and ireland finally some results are given for the whole of europe

welfare egalitarianism in non rival environments we study equity in economies where a set of agents commonly own a technology producing a non rival good from their private contributions a social ordering function associates to each economy a complete ranking of the allocations we build social ordering functions satisfying the property that individual welfare levels exceeding a legitimate upper bound should be reduced combining that property with efficiency and robustness properties with respect to changes in the set of agents we obtain a kind of welfare egalitarianism based on a constructed numerical representation of individual preferences

subgame perfect cooperative agreements in a dynamic game of climate change abstract we model climate change as a dynamic game and prove existence of a unique subgame perfect nash equilibrium spne that is also markov perfect we interpret this unique spne as the business as usual bau equilibrium and show that if the countries are not sufficiently symmetric then the familiar trigger strategy equilibria may not be pareto improvements over the bau equilibrium and may even lack efficiency properties we then motivate and introduce a subgame perfect cooperative agreement as an improvement over the bau equilibrium in the sense that every country or coalition of countries is better off in every subgame irrespective of the extent of heterogeneity of the countries we characterize subgame perfect cooperative agreements and identify sufficient conditions for their existence we show that direct or indirect transfers between countries to balance the costs and benefits of controlling climate change are a necessity and not a matter of approach

incentives in the generalized mdp procedure for the provision of public goods malinvaud 1970 1971 and dreze and de la vallee poussin 1971 have independently proposed a well defined planning procedure for an economy with public goods this procedure which has come to be called the mdp procedure has several desirable properties given correct revelation of each participant s preference if each individual truthfully announces his marginal rates of substitution between public goods and a private good every trajectory of the process lies entirely in the space of feasible allocations and monotonically converges to an individually rational pareto optimum moreover as is shown in champsaur 1976 given correct revelation this procedure is neutral to any kind of distributional value judgements in the sense that every individually rational pareto optimum can be attained as a limit of some trajectory defined by the process in connection with the problem of whether the participants in the mdp procedure reveal their correct preferences little literature has so far been written there are now results available which have been derived by dreze and de la vallee poussin 1971 and roberts 1979 that i at every iterative stage telling the truth is a maximin strategy for each individual and at an equilibrium of the process is a nash equilibrium strategy and that ii correct revelation produces a dominant strategy equilibrium at every instant if a society consists of just two individuals nevertheless maximin strategies are played only because of the rather restricted assumption on each participant s behaviour while confinement to the case of a two person society is too severe to give meaningful implications for reality in either case one might be fully justified in believing that truthful revelation will hardly appear in the mdp procedure fortunately almost all the properties of the mdp procedure can be preserved under circumstances where the agents misrepresent their marginal rates of substitution henry 1979 and roberts 1979 have shown that as long as each individual chooses a nash type strategy at each instant the process maintains the same properties as in the case of correct revelation except that the adjustment speeds of public goods are significantly reduced this result implies the mdp procedure is implementable under game theoretic circumstances but at the same time it exposes serious problems in several respects in the first place since the nash equilibrium strategy of each agent is not necessarily the truthful announcement the virtue of honesty is no longer of positive significance in the mdp procedure secondly for the validity of its solution concept if each agent plays a nash equilibrium strategy at all he must have complete knowledge relating to the possible strategies chosen by all the other agents clearly this supposition

a core selection for regulating a single output monopoly we consider a single output production economy in which all coalitions of agents have access to the technology under increasing returns to scale the corresponding cooperative game without side payments is convex and hence has a large core we propose a core selection that is obtained by considering the lowest price of output relative to input such that the corresponding vector of indirect utilities is feasible the constant returns equivalent allocation is feasible and achieves this utility vector it satisfied the property of technological monotonicity when the production possibility set expands no agent faces a utility loss technological monotonicity and the core property together characterize the constant returns equivalent solution

uniform externalities two axioms for fair allocation abstract positive resp negative preference externalities say that an agent always prefers his actual welfare to his virtual welfare should other agents share his preferences resp prefers his virtual to his actual welfare negative group externalities say that an agent never prefers his actual welfare to his virtual welfare should he be the sole user of the resources these two axioms unify several familiar fairness properties and yield some new ideas as well in the division of unproduced commodities and the cooperative production of a private or a public good we also discuss their compatibility with no envy and resource monotonicity

a game theoretical approach to sharing penalties and rewards in projects this paper analyzes situations in which a project consisting of several activities is not realized according to plan if the project is expedited a reward arises analogously a penalty arises if the project is delayed this paper considers the case of arbitrary nondecreasing reward and penalty functions on the total expedition and delay respectively attention is focused on how to divide the total reward penalty among the activities the core of a corresponding cooperative project game determines a set of stable allocations of the total reward penalty in the definition of project games surplus cost sharing mechanisms are used to take into account the specific characteristics of the reward penalty function at hand it turns out that project games are related to bankruptcy and taxation games this relation allows us to establish nonemptiness of the core of project games

incentive mechanism design for production economies with both private and public ownerships in this paper we dealwith the probl em of incentive mechanism design which yields efficient allocations for general mixed ownership economies when preferences individual endowments and coalition patterns among individuals are unknown to the planner we do so by doubly implementing the proportional solution for economies with any number of private sector and public sector commodities and any number of individuals as well as the coexistence of privately and publicly owned firms with general convex production possibility sets furthermore the mechanisms work not only for three or more agents but also for two agent economies journal of economic literature classification numbers c72 d61 d71 d82 2000 academic press

organisational ecology in the danish restaurant sector abstract the article demonstrates the high rates of organisational turmoil in the restaurant sector the intensity of natural selection depends mainly on the age and size of the enterprise affiliation with other enterprises increases the chances of survival but only if there is a substantial number of units co operating in a group surprisingly the level of staff competence and managerial capacity measured in quantitative terms cannot explain the level of success or failure in the restaurant business to any significant degree organisational ecology which constitutes the theoretical and methodological base of this article is a promising research approach to tourism issues the article which focuses on explanations for the occurrence of life events in the restaurant sector calls for more careful policy considerations than are often the case in particular human resource and labour market related actions should be critically reassessed

fair production and allocation of an excludable nonrival good we study fairness in economies with one private good and one partially excludable nonrival good a social ordering function determines for each profile of preferences an ordering of all conceivable allocations we propose the following free lunch aversion condition if the private good contributions of two agents consuming the same quantity of the nonrival good have opposite signs reducing that gap improves social welfare this condition combined with the more standard requirements of unanimous indifference and responsiveness delivers a form of welfare egalitarianism in which an agent s welfare at an allocation is measured by the quantity of the nonrival good that consumed at no cost would leave her indifferent to the bundle she is assigned

economic models of nato abstract the seminal work of olson and zeckhauser 1966 on the economic theory of alliances in particular nato provides the theoretical background for this paper after restating their results on alliance allocation behavior in a formal framework we show that these results may fail in a context with decentralized production of the public defense commodity finally we introduce a simple mechanism which allows the implementation of an efficient allocation characterized by proportional burden sharing and cost monotonicity these results can also be applied to other public goods problems

cost share equilibria a lindahlian approach abstract we offer a new formalization of lindahl s equilibrium notion for public goods which yields an endogenous theory of profit distribution in line with the benefit approach to taxation increasing returns in the production of public goods are not a priori excluded our equilibrium notion coincides with kaneko s ratio equilibrium for economies with only one public good by reinterpreting the commodity space the equilibrium concept can be applied to economies with purely private goods or with externalities in the pure private good case our concept singles out allocations that are efficient and where individual net payments agree with average cost

on the inefficiency of two part tariffs the partial equilibrium literature on two part tariffs suggests that if a commodity is produced under increasing returns efficiency can be achieved through marginal cost pricing and a suitable choice of entry fees fixed charge which may vary from consumer to consumer we show that this partial equilibrium intuition cannot be extended beyond some special cases even with a consumer specific fixed charge it is possible that none of the equilibria yield pareto efficiency furthermore it may be impossible to achieve pareto efficiency through any specification of taxes which are levied solely to cover losses hotelling 1939 and lerner 1944 among others see for example the surveys by ruggles 1949 1950 argued that firms operating under increasing returns to scale should be regulated to equate their marginal cost to the price of the output and the resulting losses financed through lump sum taxes being concerned primarily with efficiency issues the proponents of the marginal cost pricing principle did not advocate any particular distribution of the lump sum taxes among the consumers after the ensuing debate see for example ruggles 1950 there seems to have been a general agreement that marginal cost pricing is necessary for efficiency while admitting this coase 1946 presented an illuminating analysis of the drawbacks of what he called the hotelling lerner solution and also proposed an alternative solution it will be useful to begin by briefly recalling coase s criticism of the hotelling lerner solution apart from the practical problem of collecting lump sum taxes he emphasized two distinct drawbacks of the hotelling lerner scheme he claimed that this solution would not necessarily guarantee efficiency in the sense that it might lead to a marginal cost pricing equilibrium in which a positive amount of the commodity was produced whereas it would be better not to produce the commodity at all this can be restated simply as the argument that in the presence of non convexities marginal conditions need not guarantee global optimality there may be several marginal cost pricing equilibria some efficient and some inefficient as such this phenomenon can hardly be ruled out coase s second objection to the hotelling lerner solution was that it could effectively alter the income distribution if for instance a lump sum tax was imposed on all the consumers but only some of them consumed the commodity produced by the firm operating under increasing returns to scale then there would effectively be a redistribution in favour of those who consumed this subsidized commodity it was natural to keep the issue of efficiency separate from that of equity and coase argued that the hotelling lerner solution

ratio lindahl equilibria and an informationally efficient and implementable mixed ownership system abstract in this paper we formalize an informationally efficient and implementable mixed ownership economic institutional framework by using the ratio lindahl equilibrium that yields pareto efficient and individually rational allocations for public goods economies with general variable returns we consider the incentive aspects of the system by giving an incentive compatible informationally efficient and privacy preserving mechanism whose nash allocations coincide with ratio lindahl allocations moreover the mechanism is well behaved in the sense that it uses an individually feasible balanced and continuous outcome function and further has a message space of minimal dimension

a characterization of strongly locally incentive compatible planning procedures with public goods this paper provides a systematic study of planning procedures with public goods in which local truthful revelation of preferences is a dominant strategy these procedures are said to be strongly locally individually incentive compatible sliic we first characterize the time invariant continuously differentiable planning procedures that are sliic then we study properties such as balancedness cheatproofness with respect to coalitions neutrality individual rationality and we point out the connection with the mdp procedures

density dependence in the evolution of populations of newspaper organizations a model of density dependence is proposed to explain regularities in the growth and decline of organizational populations density the number of organizations is assumed to be a function of the social processes of legitimation and competition at low density the model predicts that the legitimation process will dominate and will lead to high organizational founding rates and low organizational mortality rates at high levels of density competition will dominate and consequently founding rates will decline and mortality rates will rise the model is tested with hazard function models using data from nine newspaper populations spanning the 19th and 20th centuries and covering over 5200 newspapers analysis offounding rates provides strong empirical support for the model analysis of mortality rates reveals that the model holds for large populations

justifying the lindahl solution as an outcome of fair cooperation the motivation for the lindahl equilibrium is mostly a rather artificial price mechanism even though the analogy to a competitive market was emphasised by lindahl himself his approach does not directly explain the normative ideas behind his concept in the present paper we therefore show how the lindahl equilibrium can be deduced from some simple equity axioms these normative assumptions are the benefit principle on the one hand and the equal sacrifice principle or equivalently a non envy condition as a postulate for distributional equity on the other fairness among agents with different preferences and incomes is taken into account by considering their marginal willingness to pay as shadow prices in this way the reason why the lindahl solution can be perceived as an outcome of fair cooperation might become more understandable

the pure theory of public goods efficiency decentralization and the core the authors extend the findings of mas colell on valuation equilibria and the relationship of cost share equilibria with the core they allow for any finite number of private goods and a set of public projects without any structure the authors show the two welfare theorems for valuation equilibrium the inclusion of the set of cost share equilibria in the core and the nonequivalence of these two sets for an economy with a finite number of agents copyright 1996 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

implementation of balanced linear cost share equilibrium solution in nash and strong nash equilibria abstract this paper considers the incentive aspect of the balanced linear cost share equilibrium blcse which yields an endogenous theory of profit distribution for public goods economies with convex production technologies we do so by presenting an incentive compatible mechanism which doubly implements the blcse solution in nash and strong nash equilibria so that nash allocations and strong nash allocations coincide with blcse allocations the mechanism presented here allows not only preferences and initial endowments but also coalition patterns to be privately observed in addition it works not only for three or more agents but also for two agent economies

public goods and the distribution of income abstract this article addresses conceptual issues concerning the distributive incidence of public goods solutions depend on the specific purposes for asking the question of distributive incidence notably assessing the extent to which various public goods should be provided determining how the provision of public goods affects the desirability of income redistribution and providing a meaningful description of the distribution of well being in the course of the analysis a simple and intuitive version of the benefit principle of taxation qualitatively different from those commonly advanced in pertinent literatures is presented and some of the problems confronting empirical attempts to measure the distributive incidence of public goods are resolved

population monotonic allocation schemes for cooperative games with transferable utility abstract an allocation scheme for a cooperative game specifies how to allocate the worth of every coalition it is population monotonic if each player s payoff increases as the coalition to which he belongs grows larger we show that essentially a game has a population monotonic allocation scheme pmas if and only if it is a positive linear combination of monotonic simple games with veto control a dual characterization is also provided sufficient conditions for the existence of a pmas include convexity and increasing average marginal contributions if the game is convex its extended shapley value is a pmas classification number 026

leaving some stones unturned a reassessment of iterative planning theory abstract drawbacks of standard iterative planning algorithms include i planner actions are just on paper calculations without direct economic consequences and may converge very slowly ii planners cannot act systematically on hunches and intuitions and iii planners can observe unrealistically detailed information these problems are addressed through a bayesian learning model it is shown in sharp contrast to the standard literature that planners will not necessarily settle in the long run on even approximately optimal prices in an example the planner can end up setting prices in every period that guarantee chronic shortage this is an outcome of a fully optimizing model

reward patterns of fair solutions abstract the solutions proposed in the literature on fair allocations are sensitive to the preference profiles of the agents as a consequence each of them displays a specific distribution pattern which may be interpreted as rewarding certain kinds of preferences at the expense of others in the basic models with private goods and decreasing returns the equal income competitive equilibrium tends to favor the eccentric preferences whereas most egalitarian equivalent solutions tend to reward the agents who like particular resources the identification of the rewarding pattern of each mechanism sheds light on its ethical content and may help select the adequate solution in concrete applications in this analysis a preference monotonicity property turns out to be satisfied by many solutions

joint ownership of a convex technology comparison of three solutions a given set of agents jointly own and operate a decreasing returns to scale technology with a single input and a single output they all contribute some input and receive some of the output what first best allocation is equitable we discuss three allocation mechanisms the equal benefits solution gives every agent the same benefit computed at the supporting price the equal returns solution equalizes returns output shares input contributions across agents the constant returns equivalent solution gives every agent his indirect utility level at some common price of output relative to input a lower and an upper bound on individual welfares play a key role in these axiomatic characterisation results

density dependence versus population dynamics an ecological study of failings in the california wine industry in this ecological study we show that the particular curvilinear formulation of the relationship between density and the failing rate of organizations proposed by hannan and freeman does not hold for the california wine industry between 1940 and 1985 we demonstrate instead that an alternative model focusing on prior foundings and prior failings gives a superior account of the failing rate in this population we argue that hannan and freeman s density dependent model of organizational mortality systematically overstates the negative effects of illegitimacy on business organizations we argue further that their model underestimates business organizations ability to avoid elimination by migrating to neighboring niches and by enlarging their initial niche

strategic behavior in decentralized planning procedures noncooperative strategic behaviors are studied in the malinvaud dreze de la vallee poussin decentralized planning procedure we depart from the assumption of myopic behavior by assuming that every agent takes into account the effect over a given period of time 0 t of his answers to the center one shows that for t large every nash equilibrium of the ensuing game in intertemporal strategies approaches i a competitive equilibrium in an exchange economy and ii a lindahl equilibrium in an economy with public goods thus the center loses any significant influence on the income distribution

equity as a prerequisite for stability of cooperation on global public good provision analysing cooperative provision of a global public good such as climate protection we explore the relationship between equitable burden sharing on the one hand and core stability on the other to assess the size of the burden which a public good contribution entails for a country we make use of a specific measure based on moulin econometrica 55 963 977 1987 in particular we show that a pareto optimal allocation which is not in the core can always be blocked by a group of countries with the highest moulin sacrifices in this sense it is the overburdening and thus unfair treatment of some countries that provides the reason for core instability by contrast a pareto optimal allocation is in the core if the public good contributions are fairly equally distributed according to their moulin sacrifices the potential implications of our theoretical analysis for global climate policy are also discussed

dynamic procedures and incentives in public good economies in this paper we consider economies involving one public good one private good and convex technology and propose an informationally decentralized dynamic nontatonnement procedure that converges in general from the initial endowments to an allocation in the core of the economy we then consider a general class of procedures and show that there exists none in the class that is locally incentive compatible and individually rational these results show that there exists a trade off between the requirements of local incentive compatibility and equitable cost sharing

the replacement principle in economies with single peaked preferences abstract our objective is to investigate the implications of the replacement principle for the fair allocation of an infinitely divisible commodity among agents with single peaked preferences the principle says that when one of the components of the data entering the description of the problem to be solved changes all of the relevant agents should be affected in the same direction they all gain or they all lose we apply it to situations in which the preferences of one of the agents may change under the name ofwelfare domination under preference replacement we show that there is no selection from the no envy and pareto solution satisfying it then we weaken it by limiting its application to situations in which the change is not so disruptive that it turns the economy from one in which there is too little of the commodity to one in which there is too much or conversely we show that there is only one selection from the no envy and pareto solution satisfying this property andreplication invariance it is the uniform rule a solution that has played a central role in previous analyses of the problem journal of economic literatureclassification numbers d51 d63 d70

sharing the cost of a public good an incentive constrained axiomatic approach we study the problem of provision and cost sharing of a public good in large economies where exclusion complete or partial is possible we search for incentive constrained efficient allocation rules that display fairness properties population monotonicity says that an increase in population should not be detrimental to anyone demand monotonicity states that an increase in the demand for the public good in the sense of a first order stochastic dominance shift in the distribution of preferences should not be detrimental to any agent whose preferences remain unchanged under suitable domain restrictions we give an explicit characterization of all incentive constrained efficient allocation rules we then show that there exists a unique incentive constrained efficient and demand monotonic allocation rule the so called serial rule in the binary public good case the serial rule is also the only incentive constrained efficient and population monotonic rule

regulating the anticommons insights from public expenditure theory this article offers a new interpretation of the traditional cournot complements problem or anticommons by using the theory of public goods to gain a perspective on the problem specifically i examine the pricing strategies and regulation of multiple monopolies that produce products which consumers view as perfect complements i show that collusion by the firms increases total social welfare and that the collusion problem can be reinterpreted as a problem of provision of public goods from the point of view of the firms i take this insight further and derive the familiar concepts of the samuelson marginal condition and the ratio equilibrium for the firms i compare these outcomes to the first best solution and then apply incentive compatible mechanisms to strategically implement the pareto superior ratio equilibrium outcome and the optimal marginal cost pricing outcome finally i show how this methodology can be applied to the more familiar cournot model of oligopoly

equality of resources implies equality of welfare if one is an egalitarian should one try to equalize resources available to agents or to equalize their welfares with a suitably general conception of what resources are these two conceptions cannot be distinguished an allocation mechanism is defined on a space of economies and is required to satisfy various axioms that are necessary conditions for equalizing resources among a population the unique mechanism satisfying these axioms on a large domain of economies is the one that allocates commodities so as to equalize utilities of the agents methodologically the theorem is a generalization of bargaining theory because the mechanisms are defined on commodity space

what is benefit taxation abstract benefit taxation is a system in which individuals are taxed according to the benefits they receive from public expenditures this paper describes an alternative to the standard lindahl method of determining the distribution of individual benefits from government provided public goods and uses this alternative to calculate benefit taxes this alternative avoids some of the paradoxial features of lindahl pricing and generates outcomes in which all consumers benefit from reduced costs of providing public goods an illustrative calculation shows that benefit taxes defined in this way may be quite regressive

theory and practice of decentralized planning procedures the paper surveys the theory of decentralized planning procedures dealing with price guided quantity guided and mixed procedures informational and incentive properties of the various procedures are dealt with as is the problem of public goods the practice of planning in the u s s r hungary and india is also discussed copyright 1990 by blackwell publishers ltd

egalitarian equivalent cost sharing of a public good in an economy with one public and one private good egalitarian equivalent cost sharing consists of finding the highest public good level x such that consuming x for free yields a feasible utility distribution the corresponding feasible allocation typically unique called egalitarian equivalent is in the core of the economy conversely any cost sharing method satisfying pareto optimality cost monotonicity nobody suffers a utility loss if the production technology improves upon ceteris paribus and individual rationality no single agent coalition objects or no private transfers no agent receives a positive amount of private good must select an egalitarian equivalent allocation in every economy copyright 1987 by the econometric society

all sorry to disagree a general principle for the provision of non rival goods a group of agents with identical rights but different preferences share the cost of a public good in a situation where each agent is held responsible for his own preferences the principle says that nobody can benefit from the difference between his and other agents preferences all are sorry to disagree this axiom is incompatible with the pay according to benefits approach and in particular with lindahl pricing methods however it is compatible with foley s stand alone core constraints the author s axiom unlike the stand alone properties applies to any number of public goods or bads and to arbitrary public decisions copyright 1992 by the editors of the scandinavian journal of economics

incentive compatibility without compensation abstract standard public good mechanisms rely on a transferable medium of compensation to overcome incentive compatibility constraints groves laffont if no such medium exists and information is incomplete the available rules with satisfactory welfare and incentice compatibility properties require a unidimensional set of alternatives we define a dynamic procedure for two dimensional economies that is pareto optimal and individually rational with incentives as those of rules exploiting compensatory transfers

endogenous coalation formation in cooperative oligopolies coalition formation among firms in a cooperative oligopolistic market is endogenously derived in terms of the relevant market characteristics market demand firm costs and the behavioral assumptions that every possible coalition of firms makes about firms that are not in the coalition this is done by defining different games in characteristic function form each game corresponding to a different assumption about how a coalition s opponents will respond by establishing cooperative equilibria that cannot be upset by any firm acting alone or any group of firms acting in concert the authors are able to derive coalition formation in the market endogenously copyright 1989 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

equivalence of the core and competitive equilibrium in a tiebout economy with crowding types abstract we propose a new model of a local public goods economy with differentiated crowding the new feature is that taste and crowding characteristics of agents are distinguished from one another we prove that if the economy satisfies strict small group effectiveness then the core is equivalent to the set of tiebout equilibrium outcomes equilibrium prices are defined to depend solely on crowding characteristics this implies that only publicly observable information and not private information such as preferences is needed to induce agents to sort themselves into efficient jurisdictions thus our model allows us to satisfy bewley s 6 anonymity requirement on taxes in his well known criticism of the tiebout hypothesis

the acid rain game as a resource allocation process with an application to the international cooperation among finland russia and estonia we consider optimal cooperation in transboundary air pollution abatement among several countries under incomplete information i e local information only on marginal emission abatement costs and damage costs directions of emission abatement in each country are determined that generate a succession of emissions programs shown to converge to an economic optimum a cost sharing scheme that results from appropriately designed international transfers guarantees that the individual costs of all parties are nonincreasing along the path towards the optimum a version of maler s 1989 acid rain game is used for a numerical application