Economic design

, Volume 2, Issue 1, pp 245–261 | Cite as

Public good provision and the Smith Process

  • Steffen Ziss
Article
  • 14 Downloads

Abstract

An existing public good provision mechanism known as the Smith Process (SP) is extended to allow for non-zero fixed cost, non-constant marginal cost and imperfectly divisible output. Two versions of SP are considered: unrestricted (USP) and restricted with a unanimity rule (RSPU). USP implements efficient choice provided the gap between marginal and average cost is sufficiently low. RSPU relaxes the conditions for efficient implementation but increases the set of equilibria involving inefficient choice. Furthermore, if weakly dominated strategies are eliminated, then non-provision is no longer an equilibrium under RSPU but continues to be one under USP.

JEL classification

C72 D71 H41 

Keywords

Public good provision mechanisms Smith Process 

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Copyright information

© Elsevier Science B.V. 1996

Authors and Affiliations

  • Steffen Ziss
    • 1
  1. 1.Department of EconomicsUniversity of SydneyAustralia

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