Existence and Warr Neutrality for Matching Equilibria in a Public Good Economy: An Aggregative Game Approach

39 Pages Posted: 10 Jan 2010

See all articles by Wolfgang Buchholz

Wolfgang Buchholz

Universitaet Regensburg; CESifo (Center for Economic Studies and Ifo Institute)

Richard C. Cornes

Australian National University (ANU) - Faculty of Economics & Commerce; CESifo (Center for Economic Studies and Ifo Institute)

Dirk T. G. Rübbelke

Technische Universität Bergakademie Freiberg

Date Written: December 2009

Abstract

Using the aggregative game approach as developed by Cornes and Hartley (2003, 2007) this paper analyzes the conditions under which matching mechanisms in a public good economy lead to interior matching equilibria in which all agents make strictly positive flat contributions to the public good. In particular we show that the distribution of income among the agents is a crucial determinant for the existence of interior matching equilibria. In addition, we explore which matching mechanisms show Warr neutrality and how the size of the economy affects the possibility of implementing a certain type of Pareto optimal solutions through matching.

JEL Classification: H41, H77, Q54

Suggested Citation

Buchholz, Wolfgang and Cornes, Richard C. and Rübbelke, Dirk T. G., Existence and Warr Neutrality for Matching Equilibria in a Public Good Economy: An Aggregative Game Approach (December 2009). CESifo Working Paper Series No. 2884. Available at SSRN: https://ssrn.com/abstract=1532673

Wolfgang Buchholz (Contact Author)

Universitaet Regensburg ( email )

D-93040 Regensburg, 93053
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Richard C. Cornes

Australian National University (ANU) - Faculty of Economics & Commerce ( email )

Canberra, Australian Capital Territory 2601
Australia

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

Dirk T. G. Rübbelke

Technische Universität Bergakademie Freiberg ( email )

Freiberg, 09599
Germany

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