Abstract
The paper deals with a simple model with only one private and one public good. The core of such an economy is shown to have strong properties, in particular, it is stable in thevon Neumann-Morgenstern sense and complete. A natural candidate for a selection within the core is the concept ofLindahl equilibrium which constitutes a generalization of the concept of competitive equilibrium in an economy with private goods only. Although theLindahl equilibria belong in general to the core, they do not have the same symmetry properties. It is shown that it is possible to select in the core allocations having stronger symmetry properties than theLindahl equilibria.
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References
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The author gratefully acknowledges the helpful suggestions ofAndrew Postlewaite andClaus Weddepohl.
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Champsaur, P. How to share the cost of a public good?. Int J Game Theory 4, 113–129 (1975). https://doi.org/10.1007/BF01780629
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DOI: https://doi.org/10.1007/BF01780629