The provision and pricing of excludable public goods: Ramsey–Boiteux pricing versus bundling

Hellwig, Martin

doi:10.1016/j.jpubeco.2006.09.003

Cited by 16 publications

(7 citation statements)

References 27 publications

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“…This literature is related because, as we will show, a mechanism design problem with participation constraints has many similarities with a problem of public sector pricing subject to a self-financing requirement. This observation has previously been made by Hellwig (2007), albeit in a somewhat different model. Moreover, Hellwig (2007) does not address the question whether the imposition of participation constraints, or, equivalently, of self-financing requirements is desirable.…”

Section: Related Literaturesupporting

confidence: 72%

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An Incomplete Contracts Perspective on the Provision and Pricing of Excludable Public Goods

Bierbrauer

2010

SSRN Journal

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We study whether a firm that produces and sells access to an excludable public good should face a self-financing requirement, or, alternatively, receive subsidies that help to cover the cost of public-goods provision. The main result is that the desirability of a self-financing requirement is shaped by an equity-efficiency trade-off: While first-best efficiency is out of reach with such a requirement, its imposition limits the firm's ability of rent extraction. Hence, consumer surplus may be higher if the firm has no access to public funds.

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Section: Related Literaturesupporting

confidence: 72%

“…This observation has previously been made by Hellwig (2007), albeit in a somewhat different model. Moreover, Hellwig (2007) does not address the question whether the imposition of participation constraints, or, equivalently, of self-financing requirements is desirable.…”

Section: Related Literaturesupporting

confidence: 72%

An Incomplete Contracts Perspective on the Provision and Pricing of Excludable Public Goods

Bierbrauer

2010

SSRN Journal

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“…In related contexts, other studies already have emphasized the relevance of community heterogeneity on social capital (Alesina and La Ferrara, 2000), civic engagement (La Ferrara, 2002;Costa and Kahn, 2003), or the maintenance of irrigation systems (Bardhan and Dayton-Johnson, 2002 and valuations for a public good are often exogenously given and cannot be changed. In these cases, if valuations are heterogeneous but private information, one possible solution that has been proposed to increase social welfare is the bundling of (excludable) public goods (Hellwig, 2007;Fang and Norman, 2010). In political decision making, something similar can be observed in the guise of vote trading (logrolling).…”

Section: Discussionmentioning

confidence: 99%

Heterogeneity and Cooperation in Privileged Groups: The Role of Capability and Valuation on Public Goods Provision

Kölle

2012

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in University of CologneJuly 2012 AbstractWe experimentally investigate cooperation in privileged groups which according to Olson (1965) are groups in which at least one member has an incentive to supply a positive amount of the public good. More specifically, we analyze group member heterogeneity with respect to two dimensions: capability and valuation. Our results reveal that with and without punishment opportunities, heterogeneity crucially affects cooperation and coordination within groups. Compared to non-privileged groups, asymmetric valuations for the public good have negative effects, and asymmetric capabilities in providing the public good have positive effects on voluntary contributions. The main reason for these results are the different externalities contributions have on the other group members' payoffs affecting individuals' willingness to cooperate. Hence, whether heterogeneity facilitates or impedes collective action, and whether privileged groups are as privileged as they initially seem is subject to the nature of their asymmetry.

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“…As will be shown below, with a commonly known technology, we cannot justify the imposition of participation constraints. The observation that a mechanism design problem with participation constraints has many similarities with a problem of Ramsey taxation, or public sector pricing has previously been made by Hellwig (2007), albeit in a somewhat different model. However, Hellwig (2007) does not address the question whether the imposition of participation constraints is desirable.…”

Section: Related Literaturementioning

confidence: 99%

Incomplete contracts and excludable public goods

Bierbrauer

2011

Journal of Public Economics

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract We study the provision of an excludable public good to discuss whether the imposition of participation constraints is desirable. It is shown that this question may equivalently be cast as follows: should a firm that produces a public good receive tax revenues, or face a self-financing requirement. The main result is that the desirability of participation constraints is shaped by an equity-efficiency tradeoff: While first-best is out of reach with participation constraints, their imposition yields a more equitable distribution of the surplus. This result relies on an incomplete contracts perspective. With a benevolent mechanism designer, participation constraints are never desirable. Terms of use: Documents in EconStor may

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The provision and pricing of excludable public goods: Ramsey–Boiteux pricing versus bundling

Cited by 16 publications

References 27 publications

An Incomplete Contracts Perspective on the Provision and Pricing of Excludable Public Goods

An Incomplete Contracts Perspective on the Provision and Pricing of Excludable Public Goods

Heterogeneity and Cooperation in Privileged Groups: The Role of Capability and Valuation on Public Goods Provision

Incomplete contracts and excludable public goods

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