Matching as a Cure for Underprovision of Voluntary Public Good Supply: Analysis and an Example

17 Pages Posted: 24 Mar 2011

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: March 17, 2011

Abstract

Matching mechanisms are regarded as an important instrument to bring about Pareto optimal allocations in a public good economy and to cure the underprovision problem associated with private provision of public goods. The desired Pareto optimal interior matching equilibrium, however, emerges only under very special conditions. But we show in this note that corner solutions, in which some agents choose zero flat contributions, normally avoid underprovision and illustrate and interpret our results by a simple numerical example.

Keywords: public goods, matching, Pareto optimality

JEL Classification: C780, H410

Suggested Citation

Buchholz, Wolfgang and Cornes, Richard C. and Rübbelke, Dirk T. G., Matching as a Cure for Underprovision of Voluntary Public Good Supply: Analysis and an Example (March 17, 2011). CESifo Working Paper Series No. 3374. Available at SSRN: https://ssrn.com/abstract=1788803

Wolfgang Buchholz

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 (Contact Author)

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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