Existence, Uniqueness and Some Comparative Statics for Ratio and Lindahl Equilibria: New Wine in Old Bottles

17 Pages Posted: 6 Oct 2006

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)

Wolfgang Peters

European University Frankfurt

Date Written: September 2006

Abstract

We present a rigorous, yet elementary, demonstration of the existence of a unique Lindahl equilibrium under the assumptions that characterize the standard n-player public good model. Indeed, our approach, which exploits the aggregative structure of the public good model, lends itself to a transparent geometric representation. Moreover, it can handle the more general concept of the cost-share or ratio equilibrium. Finally, we indicate how it may be exploited to facilitate comparative static analysis of Lindahl and cost share equilibria.

Keywords: public goods, Lindahl equilibrium, ratio equilibrium

JEL Classification: H41

Suggested Citation

Buchholz, Wolfgang and Cornes, Richard C. and Peters, Wolfgang, Existence, Uniqueness and Some Comparative Statics for Ratio and Lindahl Equilibria: New Wine in Old Bottles (September 2006). CESifo Working Paper Series No. 1802. Available at SSRN: https://ssrn.com/abstract=935027

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

Wolfgang Peters

European University Frankfurt ( email )

Grosse Scharrnstr. 59
Frankfurt (Oder), Brandenburg 15230
Germany

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