Download This PaperOptimal Provision of Multiple Excludable Public Goods
45 Pages Posted: 3 May 2006
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Optimal Provision of Multiple Excludable Public Goods
Optimal Provision of Multiple Excludable Public Goods
Date Written: April 2006
Abstract
This paper studies the optimal provision mechanism for multiple excludable public goods when agents' valuations are private information. For a parametric class of problems with binary valuations, we characterize the optimal mechanism, and show that it involves bundling. Bundling alleviates the free riding problem in large economies in two ways: first, it can increase the asymptotic provision probability of socially efficient public goods from zero to one; second, it decreases the extent of use exclusions.
Keywords: Public Goods Provision, Bundling, Exclusion
JEL Classification: H41
Suggested Citation: Suggested Citation
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