does the public sector over provide club goods a general result abstract with nondistortionary user charges the first best and second best of a single club exogenous income economy with identical individuals coincide they differ if incomes differ overprovision of a superior club good then occurs in the second best

exclusion and moral hazard the case of identical demand abstract this paper examines the problem of costly exclusion of individuals from a public good previous analyses of exclusion have treated it as solely a question of technologies in our analysis exclusion depends on technology and incentives in this paper providers of the good design a mechanism to provide an optimal level of deterrence to free riders if individuals are heterogeneous optimal deterrence may allow some free riders we examine the effect of costs of exclusion on the samuelson condition for optimal provision and see that the desire to deter free riding leads to underprovision of the good irrespective of the degree of rivalry of the good

the economic theory of clubs some clarifications abstract we provide a classification of club models and relate differences in implications to differences in assumptions then we address two main controversies one concerning the optimality of market provisions of public goods and their optimality and the other concerning the desirability of segregation

1979 and all that a 40 year reassessment of margaret thatcher s legacy on her own terms there is a growing disaffection with mainstream politics in the world s liberal democracies in particular the uk has become an increasingly divided nation as evidenced by for example increasing inequality an emphasis on individualism the so called north south divide and the polarised debate about the uk s leaving the european union many leading uk politicians claim inheritance of the thatcher legacy to legitimate their proposed policies yet it is not clear what is that legacy thatcher s policies instituted in the 1980s and broadly pursued by subsequent governments changed the economic and social outlook of the uk criticism of her record is taken to indicate one is a left wing ideologue our contribution in the following is that we judge thatcher s policies by no standards other than her own utilising an holistic approach we consider whether neo liberal policies facilitated or undermined the uk s achieving thatcher s stated moral outcomes the growth of democratic capitalism and the strengthening of the moral economy we demonstrate in contrast to contemporary narratives of her saving the country the neo liberal economic experiment has failed to deliver even on thatcher s own terms this analysis has contemporary domestic and global implications as generally thatcherite policies continue to be applied in the uk and in other nations around the world

should congestion tolls be set by the government or by the private sector the knight pigou debate revisited this paper clarifies issues debated by a c pigou and frank knight about correcting inefficient use of congestible resources focusing for concreteness on their original example of road congestion instead of government imposed pigouvian access fees knight favoured access fees set by private toll setters we consider the case of n 2 congestible roads and an uncongestible road of arbitrary speed knight argued that in the case of a single congestible road a private toll setter would always choose the toll that pigou recommended hence the allocation would minimize aggregate commute time without government meddling we find instead that two or more toll setters would never choose pigouvian tolls except in the special case of a sufficiently fast uncongestible road moreover for uncongestible roads of slower speed the allocation of motorists under knight s proposal is almost never efficient whenever it is inefficient motorists are strictly worse off when they pay tolls set by private firms instead of paying government imposed tolls and aggregate toll revenue is also lower nevertheless if the private sector does set tolls then the full cost to motorists can be limited if the government provides an uncongestible alternative such as a train to offer potential competition along the same route

a la carte or smorgasbord multiproduct clubs with costly exclusion abstract decentralized provision of multiple congestible and excludable goods is generally not socially optimal if similar goods are provided simultaneously by smorgasbord multiproduct clubs which sell multiple club services at single prices and other clubs which sell services at individual prices the different pricing rules for the similar club goods introduce an interclub externality consumers have an incentive to use the services of smorgasbord multiproduct clubs at levels in excess of the socially optimal the discrepancy between private and social valuations for the similar services disappears if the government intervenes and equalizes prices for the similar goods across the different types of clubs

optimal asset allocation aid system from one size vs tailor made performance ratio abstract optimal asset allocation well fitting investors goals is a pressing challenge in risk management making a step forward to the sharpe ratio the parameter dependent sortino satchell generalized rachev and farinelli tibiletti performance ratios are suggested for personalizing asset allocation tailor made optimal asset paths for five different investor risk profiles are traced over a rolling 12 month investing horizon our simulations show a satisfactorily good match between asset allocation and correspondent risk profile specifically generalized rachev ratios outperform in personalized allocation for extreme risk profiles i e conservative and aggressive investors whereas sortino satchell and farinelli tibiletti ratios for those that are more moderate sharpe ratio confirms its ability in constructing steady diversified portfolios although underperformed

tastes skills and local public goods abstract this paper analyzes optimal club configurations in an economy where different types of labor are complementary in the production of private goods extending the work of berglas journal of public economics 6 409 423 1976 the analysis shows that when labor types are nonessential in production a homogeneous club configuration may be optimal despite the presence of labor complementarity the assumption that inputs are essential precluded this outcome in berglas model it is shown that homogeneous clubs are optimal when complementarity is weak or when preferences are substantially different

impact of counter urbanization on size population mix and welfare of an agricultural region the article explains the phenomenon of counter urbanization which has become prominent in most developed countries we develop a model that provides an economic rationalization for the observed willingness of incumbent farmers of a rural region to absorb nonfarmer urban migrants the analytical findings show that counter urbanization increases the region s welfare maximizing population decreases the optimal number of incumbent farmers and increases the per capita welfare the empirical results which are based on data from rural israel demonstrate that while the optimal population of farmers decreases slightly the total optimal population of the region more than triples and farmers per capita welfare almost doubles

ski lift pricing with applications to labor and other markets reply after we wrote our paper on pricing at ski areas barro and romer 1987 we received several comments like that of tyler cowen and amihai glazer 1991 noting that our results could be interpreted as special cases of results that have been established in club theory we also received comments claiming that our results were clearly wrong because they contradicted standard results in club theory we now sympathize with the economist who was reportedly told by a critic that your result is trivial wrong and i already proved it when we wrote our paper we were aware that ski areas were sometimes mentioned as examples of club goods see for example the paper by suzanne scotchmer 1985 we did not pursue the literature on clubs because our problem contained no club goods the goods we dealt with rides up a chair lift are conventional private goods our result also contradicted the one result from club theory that we knew the standard club analysis of a ski area treats it as a shared facility each member in the club decides how intensively to use this facility in this setting eitan berglas 1976 first showed that both a membership fee and a usage fee are necessary to support an efficient allocation our finding was that queues with no usage fee support an efficient allocation nevertheless cowen and glazer are correct that our results have much in common with results from club theory specifically our results can be interpreted as special cases of results for clubs that are not subject to variable intensity of usage there are therefore two interesting questions why does the analysis of a problem with private goods resemble the analysis of a problem with club goods and why does our problem resemble a club problem in which people cannot vary how often they use the shared facilities the answer to both of these questions depends on the observation that it is possible to treat a bundle of private goods as a

on price taking equilibria in club economies with nonanonymous crowding abstract competitive equilibrium in a coalition production economy or a club economy typically does not exist when there is free entry for two reasons first there may be an integer problem as is familiar from club theory with anonymous crowding second optimal groups may have different compositions from the population and then even if there is no integer problem it may be impossible to partition the population into optimal groups i define a notion of approximate equilibrium and show that such an equilibrium always exists in a sufficiently large economy i focus on the optimal size of the economy rather than of clubs

location choice product proliferation and entry deterrence within a slightly modified version of hotelling s model we reconsider the claim that the threat of entry induces existing firms to produce a larger number of products than they would otherwise we show that entry deterrence although optimal need not be achieved through product proliferation in some cases the incumbent monopolist resorts to an entry deterring strategy based on location choice rather than product proliferation we also show that in some cases the number of products chosen by the incumbent facing the threat of entry is strictly greater than the minimum number required to deter entry

credit and identity theft abstract the quintessential crime of the information age is identity theft the malicious use of personal identifying data in this paper we model identity and its use in credit transactions various types of identity theft occur in equilibrium including new account fraud existing account fraud and friendly fraud the equilibrium incidence of identity theft represents a tradeoff between a desire to avoid costly or invasive monitoring of individuals on the one hand and the need to control transactions fraud on the other our results suggest that technological advances will not eliminate this tradeoff

optimality of a competitive equilibrium in a small open city with congestion abstract consider a small spatial economy with a congestion externality in the public transportation sector we prove that the competitive equilibrium allocation coincides with the social optimum allocation despite the presence of the congestion externality to this end we first specify a set up conditions for a competitive equilibrium allocation and then we find another set of conditions for social optimality by comparing the two set of conditions we prove that the competitive allocation is compatible with the social optimal allocation we would like to emphasize the fact that no optimal external toll such as the optimal congestion toll collected by a transportation authority is required to attain the optimal allocation our privately owned and selfish profit maximizing transportation companies end up with charging the price exactly equivalent to the optimal toll

exclusion and the theory of clubs this paper examines the competitive provision of club goods with costly exclusion we consider two exclusion regimes fine and coarse with fine exclusion a provider can charge both a membership fee and a per use price with coarse exclusion a provider can charge a membership fee only we show that competitive club good providers choose both the efficient exclusion regime which depends on the costs of exclusion and the associated efficient resource allocation thus with costly exclusion the competitive provision of club goods is constrained pareto efficient

exclusion and the private enforcement of property rights abstract this paper develops a model of exclusion and property rights consumers choose between legal and illegal use a monopoly provider chooses a price for legal use a fine for illegal use and a level of monitoring to detect illegal use this model features a continuum of exclusion regimes instead of only the poles of private and public provision as is typical since the necessity of enforcing property rights creates two classes of users the provider is forced to price discriminate furthermore both the equilibrium and optimum feature imperfect exclusion and equilibrium exclusion is excessive

quantities qualities and multiple public services in the tiebout model abstract this paper introduces a new more realistic characterization of local public services this characterization fits education parks and streets none of which are a pure samuelsonian good it is shown that tiebout s hypothesis holds for this new type of services provided correct user charges are adopted introducing several local services considerably affects the results the paper emphasizes the difference in tastes with regard to quality as opposed to quantity earlier literature is shown to apply to the role of quality and ignores the role of quantity the effect of the latter makes mixed communities more efficient than segregated ones it is shown that efficient allocation with mixed communities is an equilibrium in a costless mobility tiebout type setting

competitive equilibrium and the core in club economies with anonymous crowding in club economies with anonymous crowding competitive equilibrium states of the economy are efficient and coincide with the core when there is only one private good anonymous admission prices permit consumers with different tastes to share facilities consumers might do so when their demands for facility size and crowding coincide in which case sharing is efficient thus similarity of demands is the relevant consideration for efficiently grouping consumers with different tastes

local income redistribution a club theoretic analysis abstract this paper analyzes optimal income redistribution in a club model where interclub transfers are ruled out redistribution must proceed on a local level in heterogeneous clubs this assumption induces a trade off between equity and efficiency in that the efficiency loss associated with club heterogeneity must be borne in order for redistribution to occur the optimal club structure depends on society s evaluation of this trade off

the market provision of club goods in the presence of scale economies a natural club monopoly exists when economies of scale are so significant relative to population size that in the efficient allocation the entire population is included in a single club under these circumstances an uncontested monopolist will inefficiently exclude some individuals from the club if marginal congestion costs are sufficiently high when the entire population is included if admitting that the entire population is profit maximizing then the facility size chosen is also efficient a perfectly contestable monopoly is always efficient external economies of scale exist when the cost of each facility declines as more facilities are provided this externality leads a competitive market to provide too few clubs but a monopolist will provide an efficient allocation because it internalizes the cost externality copyright 1990 by the london school of economics and political science

when is efficiency separable from distribution in the provision of club goods abstract using the homogeneous of degree zero inverse congestion quality function employed most frequently in the literature we characterise completely the families of utility functions which are then necessary and sufficient for break even utilitarian welfare maximising provision of club goods with self selection to be separable from distribution two types of separation involving alternatively a the price and quality b the price quality facility size and total utilisation are considered when separation is possible utility functions and optimal decisions take simple intuitive forms our results extend the scope of separation results previously obtained only for pure public goods journal of economic literature classification numbers d62 h23 h40

clubs local public goods and transportation models a synthesis abstract clubs local public goods and transportation models are analyzed within a unified model the emphasis is on the derivation of optimal allocation pricing and the size of the sharing group we derive the conditions under which optimal prices will yield surplus or deficit as well as those under which competitive provision will be efficient given heterogeneous tastes we prove that segregation according to tastes is generally efficient although several cases where this result does not hold are also discussed we show that the existing literature is unnecessarily restrictive and that the unified approach suggested here considerably extends the existing analysis of clubs local public goods and the transportation problems

profit maximizing clubs abstract we study a nash equilibrium among profit maximizing clubs which choose facility size and admission price the number of clubs is endogenous entry is deterred whenever the symmetric nash equilibrium with one additional firm would yield negative profit equilibrium exists with positive profit the equilibrium price is higher than the congestion price and the equilibrium number of clubs is bounded below by one fewer than the efficient number in general there will be too much entry than too little one can choose an economy sufficiently large that the equilibrium price is within epsilon of the competitive price

economies of scale and self financing rules with non competitive factor markets abstract when a firm or public enterprise prices output at marginal cost its profits are related to the degree of local scale economies in its cost function i show that contrary to common belief this result holds even when scale economies are affected by a rising factor supply curve thus marginal cost pricing may be profitable even with constant returns to scale examples are provided for a monopsonist both with and without price discrimination and for a case such as highways where congestion prone inputs are supplied by users court rulings governing land purchase for highways illustrate the applicability of the results

implications of alternate policies on welfare of slum dwellers evidence from pune india abstract in this paper we examine how slum dwellers value location based amenities in most developing country cities residents living in slums have poor quality dwellings and limited access to basic public services and amenities using data from pune india we estimate the residential location choices of slum dwellers which are conditional on housing quality neighborhood amenities and community structure we use these estimates to simulate the impact of alternate interventions on household welfare we find that households derive benefits from housing quality and neighborhood amenities while relocating households to the periphery has adverse consequences for household welfare we show that households could be adequately compensated out of the increased tax revenue accruing from alternative uses of the vacated central land

club theory thirty years later this paper presents a self contained survey of club theory with an emphasis on the contributions of the last fifteen years club goods are contrasted with pure public goods and equilibrium and optimality notions are contrasted after presenting three basic representations of club theory we focus on recent advances and generalizations that include heterogeneous memberships transaction costs uncertain utilization asymmetric information and noncompetitive influences an agenda for research is indicated that includes further analysis of asymmetric information institutional structure and applications

clubs and the cost of agency the paper investigates the impact of agency costs on clubmembership using a simple principal agent model under standardassumptions the paper demonstrates that increased agency costsassociated with hidden action can lead to an expansionary bias

vertical differentiation entry and market coverage with multiproduct firms abstract we consider a multiproduct monopoly producing many qualities of the same product in a market where the consumers income distribution is sufficiently wide so as to rule out the case of a natural monopoly in this context mussa and rosen 1978 journal of economic theory 18 301 317 show that a protected monopolist may decide to leave part of the market unserved here we examine whether entry threats are sufficient to induce complete market coverage we assume that the number of qualities in the incumbent s product line is endogenously determined and that both the incumbent and the entrant face the same fixed cost of introducing a new quality thus an increase in the fixed cost does not necessarily make entry more difficult as it turns out there are disjoint intervals of the fixed cost for which the monopolist s optimal policy is sufficient to deter entry even if it implies that part of the market remains uncovered when entry is not blockaded the monopolist may find it profitable to react to entry threats by upgrading his intermediate qualities the resulting higher prices will discourage more consumers from purchasing the product hence while actual entry would have resulted in complete market coverage potential entry may not improve and in many cases may worsen the extent of market coverage

transaction costs and equilibrium pricing of congested public goods with imperfect information abstract this paper examines the role of transaction costs in pricing a congested public facility which can be used with variable intensity when there exists information asymmetry between consumers and firms if a per visit price toll requires a large transaction cost of toll gates a lump sum price season ticket price may be used in equilibrium however under the lump sum price together with imperfect information high demanders in terms of visits to the facility have an incentive to patronize facilities designed for low demanders to exploit a price difference thus an adverse selection problem may arise and equilibrium is in general inefficient depending on the magnitude of the transaction cost

entrepreneurial land developers joint production local externalities and mixed housing developments abstract housing developments condos and suburban developments are not necessarily homogeneous developers provide different types of units of various sizes and other characteristics catering to different types of customers in this paper we allow joint production and local consumption externalities within each development and show that land developers who seek a profit maximizing set of units in developments may provide mixed developments we show that there exists an equilibrium and that every equilibrium is pareto efficient we provide examples in which mixed developments arise in a long run equilibrium we relate this work to a widely used hedonic pricing model by rosen 1974 and to an equilibrium concept under asymmetric information by rothschild and stiglitz 1976

a theory of intergenerational clubs intertemporal pareto efficient conditions for provision and maintenance of the shared good tolls membership size and financing are presented for intergenerational clubs an optimal membership span is also determined for nonlifetime members these pareto efficient conditions account for atemporal crowding intertemporal depreciation due to utilization and the sequence of members adequate incentives exist for privately owned clubs to act with foresight but do not necessarily exist for government owned clubs nevertheless privately owned clubs must be operated by a firm rather than the members if free rider problems regarding maintenance are to be avoided

two tier pricing of shared facilities in a free entry equilibrium we explore how well the market will provide shared facilities which are subject to congestion it is usually efficient to have multiple facilities because it is more efficient to spend resources on facilities than to endure crowding costs we assume firms can charge a membership price and a visit price we present a symmetric nash equilibrium in these two prices we show that ifthe number offirms is large the membership price will be small thus the membership price is a measure of market power when entry occurs in response to positive profit but such that entry is deterred by the prospect of negative profit in a symmetric nash equilibrium the endogenous number offirms is bounded below by one fewer than the efficient number thefees paid by a client converge to an appropriately defined competitive price as the economy is replicated

decentralization in replicated club economies with multiple private goods abstract we show that exhaustion of blocking opportunities is a sufficient condition such that every allocation in the core of a replicated club economy can be decentralized as a competitive equilibrium and that a related condition efficient scale is necessary and under an assumption on endowments sufficient such that competitive equilibrium exists and the core is nonempty these results do not require the euclidean structure and monotonicity assumed in lindahl equilibrium do not require convexity of preferences or costs and do not require the strong assumption that private goods are essential journal of economic literature classification numbers d46 d50 d61 h40

opposites attract the effect of the federal income tax code on community composition abstract if houses in two homogeneous but dissimilar communities are reorganized as a single heterogeneous community property tax payments are shifted from owners of small houses to owners of large houses we consider three aspects of the federal income tax code which causes this shifting to raise aggregate property values in the heterogeneous community first the property tax is deductible and the tax rate structure is progressive second some families do not itemize third the restriction on saving in tax deferring assets suggests the use of different interest rates to capitalize future property taxes because of these aspects heterogeneous communities are established provided the different family types desire similar levels of public service

competition and two part tariffs monopoly power of some sort is thought to have viewed two part tariffs as price discrimibe a necessary condition for a firm to have the nation devices empower to price discriminate for example a firm ployed exclusively by prefers to use a two part tariff see oi 1971 firms with market rather than charge a single price for output power this paper ofhowever a competing firm could always charge fers an explanation for the use of such price a single price that consumers would prefer and schedules by firms in earn nonnegative profits thus it seems that the highly competitive marexistence of competition in a market would result kets such as health in the elimination of any two part tariff howclubs it is argued that ever the existence of two part tariffs in many in a world with buyer markets that are or appear to be competitive uncertainty about future demands they can belies this standard assumption this paper exprovide insurance for plains why monopoly power is not required for risk averse buyers the the existence of a two part tariff i show circumfixed entry fee finances stances in which price discrimination using a a marginal price below marginal cost it is two part tariff is preferred by consumers to a sinshown that the benefits gle price and therefore why this pricing method from this lower price will be found in competitive markets such pricwill under certain ing occurs in environments with uncertainty bespecified conditions cause two part tariffs act as a form of insurance outweigh the costs of ex ante consumers plan consumption however the entry fee there is a random component to their consump

segmenting the market the monopolist s optimal product mix abstract in an industry producing products which differ in quality to consumers who vary in their willingness to pay it may happen that only a bounded number of producers can coexist at noncooperative price equilibrium in other words the industry is a natural oligopoly we are here concerned with a special example in which only one producer can survive our focus of interest in the present paper is to examine this monopolist s optimal product range depending on the dispersion of consumers willingness to pay income either i the monopolist will find it optimal to segment the market completely offering the maximum number of products permitted or ii the monopolist will offer only a single product the precise nature of this switch of policy which occurs at a certain critical distribution of consumer incomes willingness to pay is explored fully

the city network paradigm measuring urban network externalities in recent years network behaviour has been analysed extensively as the emerging model for economic growth by network behaviour a metaphor for co operative behaviour among individuals corporate

optimal and equilibrium membership in clubs in the presence of spillovers abstract this paper treats a partial equilibrium club economy in which clubs impose positive or negative externalities on one another both spillovers in congestable good and crowding are studied it is shown that an increase the relative strength of the first type of spillover may result in either an increase or decrease in the optimal club size and public good levels spillovers in crowding on the other hand have a definite effect on the optimal membership and production of public good these optimal outcomes are then compared to nash equilibrium club size and public good provision when clubs are established by profit maximizing entrepreneurs instead of a social planner

efficiency equilibrium and exclusion when the poor chase the rich using a simple adverse selection model we characterize equilibrium when the rich chase the poor if communities are established by competitive entrepreneurs the equilibrium exists is unique and is efficient it involves either complete separation or complete pooling different income groups may rank these qualitative outcomes differently we show how restrictions imposed by a central government may alter the nature of equilibrium such restrictions may be explained as the choice of a low income majority altering the equilibrium to the pooling outcome which they prefer

the economic consequences of mrs thatcher it is difficult to overstate the gravity of what is now happening to the uk economy output is falling at an almost unprecedented rate unemployment is at a level not experienced since the inter war depression and is increasing rapidly towards 3 million or 13 of the labour force which would mean rates of 20 and above in large areas of the country nor is there any foreseeable prospect of unemployment coming down instead all the signs point to a continuing increase the social and political consequences of this are hard to predict it is not just a matter of the financial hardship suffered by those thrown out of work through no fault of their own or of the strain imposed on the social welfare system but also of the mental stress disillusionment and sense of helpless ness which come with not being able to find a job this could well have a damaging long term effect on attitudes towards work particularly among young people con demned to go straight from school on to the unemployment register and is almost bound to lead to widespread social unrest the cause of sudden high unemployment in the uk is a backlash against the consensus post war economic policies of demand management to maintain near full employment of support for industry and of income maintenance and the provision of social welfare services policies which were developed in response to the experience of the inter war years the thatcher government has embraced a doctrinaire monetarist strategy for controlling inflation and a laissez faire approach to the supply side of the economy without attempting to moderate the social impact of these policies the extreme nature of this experiment has attracted a good deal of interest from abroad especially from the usa where the new president has expressed admiration for mrs thatcher and what her government is doing if only because there is a danger of governments in other countries following the uk s lead particularly as both the imf and oecd have recently urged the pursuit of similar policies it is important to draw international attention to what is now happening in the uk 18 months after mrs thatcher took office in sharp contrast to the rhetoric of government promises the economy has been set on a path of rapidly falling output and escalating unemployment leading towards the destruction of large parts of manufacturing industry at the same time the social advances which have been made during the post war period are beginning to be reversed as the government desperately seeks ways of offsetting the increase in its budget deficit caused by deepening recession

beyond sharpe ratio optimal asset allocation using different performance ratios abstract as the assumption of normality in return distributions is relaxed classic sharpe ratio and its descendants become questionable tools for constructing optimal portfolios in order to overcome the problem asymmetrical parameter dependent performance ratios have been recently proposed in the literature the aim of this note is to develop an integrated decision aid system for asset allocation based on a toolkit of eleven performance ratios a multi period portfolio optimization up covering a fixed horizon is set up at first bootstrapping of asset return distributions is assessed to recover all ratios calculations at second optimal rebalanced weights are achieved at third optimal final wealth is simulated for each ratios eventually we make a robustness test on the best performance ratios empirical simulations confirm the weakness in forecasting of sharpe ratio whereas asymmetrical parameter dependent ratios such as the generalized rachev sortino satchell and farinelli tibiletti ratios show satisfactorily robustness

exclusion and moral hazard a further analysis abstract this paper examines the impact of increasing exclusion costs on the price of a shared good and establishes a simple elasticity condition which determines whether or not the price increases with the exclusion costs we correct an error in the reasoning in silva and kahn s journal of public economics 1993 52 217 235 paper on exclusion and moral hazard and construct a class of examples to show that contrary to their claim costly exclusion of non subscribers from the consumption of a non rivalrous good can result in a lower price as compared with the first best with costless exclusion

how tame will leviathan become in institutional competition competition among governments in the provision of public goods this article critically examines thehypothesis of brennan and buchanan that competition amonggovernments in the provision of publicgoods can serve as a substitute forconstitutional constraints on governments since leviathan type governments withfree choice of tax instruments will be ableto escape competitive pressure by shiftingtaxes to immobile factors one could thinkof a rule of competition which prohibitstaxes on immobile factors indeed such arule leads to a nash equilibriumwhere the tax burden lies on the mobilefactor however net income of the citizensmay or may not increase as a result fromsuch a rule depending on a number ofvariables presented in this article acomplete substitution of constitutionalconstraints by the rule of competition may depending on the same variables evendecrease net income moreover somepotential for increases in net income maybe forgone since capital allocation andthe supply of public goods will usually beinefficient in equilibrium finally applying the rule in a real worldenvironment will be difficult and may evenlead to further serious inefficiencies forthese reasons such a rule will hardly everbe introduced hence competition amonggovernments cannot be viewed as a propersubstitute for constitutional constraints whoever is afraid of leviathan shouldthus not rely on competition amonggovernments alone

impossibility of exclusion and characteristics of public goods abstract this paper examines the impossibility of exclusion as an argument for public provision of otherwise private goods it is shown that governmental intervention can be supported only if the non existence of exclusion devices changes the character of the private good into that of a public good defined by non rivalry in consumption this will happen if the probability of getting a share of the good depends positively on the total amount provided departing from there a criterion is developed that defines economically efficient exclusion when consumption is rival the results are compared with some points raised in the discussion about public goods in the presence of congestion

land rents optimal taxation and local fiscal independence in an economy with local public goods abstract a general equilibrium model of an economy with cities farms and free migration of population is constructed the cities produce internationally traded goods via production functions subject to economies of scale they also produce housing and a local public good two areas are defined to be disjoint if households performing an economic activity in one area are not operating in the other an area is exclusive if it is disjoint to its complement the economic surplus of an area is then defined to be the value of the area s net export of goods and resources local efficiency of an area is defined to be a state in which its economic surplus attains its maximum value this state is proved to be a necessary condition for pareto optimality of the economy it is then proved that beside piguvian corrective taxes the only taxes necessary and sufficient to finance local government activities efficiently are taxes on land rents furthermore if jurisdiction of a local government is over an exclusive area no intervention of central government is necessary and local authorities can be fully autonomous if the economy can be divided into pairwise disjointed exclusive areas those areas are optimal jurisdictions in the sense that efficiency in the economy can be achieved with local authorities only

trade in a tiebout economy the purpose of this paper is to explore both the positive and normative aspects of commodity trade in a tiebout economy by tiebout economy i mean an economy with a large number of small regions for example communities or states and no impediments to the mobility of individuals between these regions this type of economy has received widespread attention since the appearance of charles tiebout s classic 1956 article on local public goods in part because it bears a close relation to the standard competitive model this relation suggests that tiebout economies may serve as an

capacity and entry under demand uncertainty this paper examines the decision to enter into a sector dominated by a monopoly if demand is random at entry time given a two period world the monopolist enters initially and enjoys an uncontested monopoly for one period while the entrant may enter and compete during the second period demand is random one period earlier and independently distributed in both periods and enitry corresponds to an irreversible capacity choice made under certain deimand all other production decisions take place after demand has been revealed risk neutrality is assumed on both sides if entry occurs then there is a cournot duopoly in the second period it is shown that concurrently with this cournot production game there is a separate stackelbergtype game with capacities as decision variables entry deterrence conditions are derived under general demand and cost assumptions it is shown that demand uncertainty changes several of the results of similar certain demand models