A generalized impure public good and linear characteristics model of green consumption

This paper provides a general framework for understanding consumer behavior related to goods and services that may be considered environmentally friendly, ethically produced, fairly traded, or some combination thereof. We generalize the impure public good model and derive its comparative static properties. The model accounts for any number of impure public (green) goods and joint production of any number of both private and public characteristics. The generalization provides a bridge between the impure public good model and the well-known linear characteristics model, both of which are special cases of the model developed here. The results show how demand for green goods and characteristics such as environmental quality depends on wealth, exogenously given levels of public goods, and the technologies of joint production. The effects of changes in technology depend critically on whether jointly produced characteristics are complements or substitutes in consumption. Several of the results are rather counterintuitive and differ in meaningful ways from existing models of impure public goods and linear characteristics. The results also illuminate several reasons for greater caution about whether it is reasonable to assume that green goods and services are necessarily beneficial for the provision of public goods.     

Kant and Lindahl*

In 1896 and 1919, respectively, Wicksell and Lindahl analyzed the public provision of public goods through parliamentary negotiation. Later, Roemer applied Kant's 1785 imperatives to the private provision of public goods by voluntary contributions. Our focal equilibrium notions are the balanced linear cost-share equilibrium for the Wicksell–Lindahl approach and the multiplicative Kantian equilibrium in the Kant–Roemer modeling. These turn out to be fundamentally equivalent, being defined by the same individual optimization problem. These notions fit well with the idea that technology is publicly owned, but we also extend them to cover private-ownership economies with exogenously given profit shares. We show that the equivalence between the Wicksell–Lindahl and Kant–Roemer notions carries over to them.     

Edgeworth and Lindahl–Foley equilibria of a General Equilibrium Model with Private Provision of Pure Public Goods

In this paper, we propose a definition of Edgeworth equilibrium for a private ownership production economy with (possibly infinitely) many private goods and a finite number of pure public goods. We show that Edgeworth equilibria exist whatever be the dimension of the private goods space and can be decentralized, in the finite and infinite dimensional cases, as Lindahl–Foley equilibria. Existence theorems for Lindahl–Foley equilibria are a by‐product of our results.     

Bargaining by Limiting Cooperation: Withholding Consent for the Level of a Public Good

This paper analyzes how the ability to limit cooperation influences the outcome of complete information bargaining between two players. When cooperation involves prompt resolution of a conflict, as in alternating-offer games and wars-of-attrition, the solutions equate the marginal rates of substitution between earlier resolution and more private goods. When cooperation involves consent for the level of a public good, the outcome again equates the marginal rates of substitution between greater cooperation (more public good) and more private goods (lower cost shares). Here, the equilibrium consists of balanced linear cost shares given by the ratio of marginal-willingness-to-pay to marginal cost.     

技术的公共品或私人品特性与国际技术溢出效应：基于我国的实证分析

本文在假设技术/知识的公共品或私人品特性条件下,研究分析了以进口贸易和FDI为传导机制的国际技术溢出对我国全要素生产率的影响。分析结果表明:通过进口贸易和FDI传导的国际R&D资本、国内R&D资本与我国全要素生产率之间存在稳定的长期均衡关系;技术的公共品或私人品特性不同,技术溢出对我国技术进步产生的影响也存在显著差异。     

Retailing public goods: The economics of corporate social responsibility

This paper explores the feasibility and desirability of Corporate Social Responsibility (CSR). We identify CSR with creation of public goods or curtailment of public bads. Using a model with profit-maximizing firms, the paper shows that there is a direct parallel between CSR and traditional models of private provision of public goods. Indeed, firms that use CSR will produce public goods at exactly the same level as predicted by the standard voluntary contribution equilibrium for public goods. We compare CSR with government provision and charitable provision, discussing when CSR by private for-profit firms could have a comparative advantage in dealing with public goods provision.     

Is the public sector too large in an economy with club goods? A case when consumers differ in both tastes and incomes

In an archetypal economy with a single private good and a single shared good, the latter represents the public sector. With the shared good a club good, we ask if second-best (SB) provision of it is too small, as usually claimed for pure public goods. When consumers differ only in exogenous incomes, if the club good is a superior good in a single-club economy, overprovision in the SB occurs if club good demand is convex in income. We show this can extend to an economy where consumers differ in both tastes and incomes, depending on the covariances between consumers' incomes and their relative strength of preference for the club and private goods, and the covariances between incomes and taste parameters.     

Entrepreneurship, Economic Risks, and Risk Insurance in the Welfare State: Results with OECD Data 1978–93

We find evidence in the OECD cross-country data to support the Knightian view that non-diversifiable economic risks shape equilibrium entrepreneurship in an occupational choice model. Differential social insurance of entrepreneurial and labor risk is found to be statistically significant and detrimental to entrepreneurship. The crowding-out effect of public production of private goods on entrepreneurship dominates the crowding-in effect of public production of public goods in the OECD data. Weak evidence is found for the proposition that the rate of entrepreneurship is related to the degree of income inequality and to the union power in the economy. The results also suggest that in countries with low GDP per capita ratio, self-employment is high.     

Consuming your way to efficiency: Public goods provision through non-distortionary tax lotteries

We revisit the classical result that taxation of private consumption is distortionary and therefore precludes the efficient provision of public goods. We introduce a nonlinear consumption tax which we call a ‘tax lottery’. Under this scheme, an ad-valorem consumption tax is supplemented with a lottery in which consumers can win cash prizes. The winning probabilities in this lottery depend on all consumers' private good consumption decisions. We show that for a given ad-valorem tax, an appropriately designed lottery can implement an efficient allocation in pure-strategy Nash equilibrium. The lottery component corrects the distortion in private consumption due to the ad-valorem tax, while the resulting tax revenue is sufficient to efficiently provide the public good and pay out the lottery prize.     

When Does Everyone Contribute in the Private Provision of Local Public Goods?

When does everyone genuinely contribute in the private provision of a local public good? We first introduce a monotonic condition to characterize the relationship between the structure of the network that underlie the noncooperative game of private provision of local public goods on the one hand, and the preferences of the agents on the other, showing that the monotonic condition is a sufficient and necessary condition of existence of a distributed Nash equilibrium (DNE) in which each agent exerts a positive amount of effort to provision of the public good (Theorem 1). We then study the number of equilibria, and, by using the monotonic condition, characterize the condition under which the DNE set is a singleton, a continuum, or null (Theorem 2). As it turns out, the structure of the network and the agents’ preferences jointly shape the effort profile in the provision of local public goods.     

International Factor Mobility, Government Size and Welfare

An examination of the available data reveals that the size of government varies considerably across time and countries. By making use of a simple general equilibrium model, this paper demonstrates that size of government is affected by the availability of capital and labour within an economy. Specifically, this paper utilises a model of a closed economy that produces one-private and one-public good. Both goods are produced by means of capital and labour. Production functions are subject to constant returns to scale and perfect competition prevails in all markets. The elasticity of substitution between the public and the private good is greater than unity and there is no international factor mobility in the initial equilibrium. The size of government is measured by total spending on the public good as a proportion of the total expenditure on the private and public goods. It is shown that capital (labour) inflow can decrease (increase) the size of government. Capital inflow increases welfare if the private good is relatively capital intensive whereas labour inflow increases welfare if the public good is relatively capital intensive.     

Step Returns in Threshold Public Goods: A Meta- and Experimental Analysis

One important determinant of voluntary contributions to public goods is the value of the public good relative to that of the forgone private good. Isaac, Walker and Thomas (1984) formalized this relation in the Marginal Per Capita Return (MPCR) and demonstrated its influence on the provision of linear public goods. This paper develops a parallel concept, in the context of a threshold public good, the Step Return (SR). After providing a meta-analysis of the effect of SR in previous experiments, we compare contributions in threshold public goods games with low, medium and high SRs. Results show that subjects respond to the SR in this setting just as they respond to the MPCR in the linear public goods setting: higher SRs lead to more contributions.     

Existence of voting-market equilibria

We show the existence of an equilibrium in a model where private goods are allocated by markets and the public good (bad) is allocated by majority rule voting.     

On the voluntary provision of “weakest‐link” public goods: The case of private information

We characterize equilibria in a private‐provision public‐good game where individuals are allowed arbitrary contribution levels and the level of the public good equals the least contribution made by an individual. Equilibrium comparative statics are derived for the interim Pareto‐dominant equilibrium. First, improvements in the cost distribution of even only one player benefit all. Second, even with such “weakest‐link” public goods, for which greater similarity of preferences would seem to facilitate coordination, decreased heterogeneity can actually decrease payoffs. Indeed, increasing the riskiness of cost distributions has an ambiguous effect on welfare. Two mechanisms are provided for improving equilibrium payoffs: Technology transfer and cheap‐talk communication. While substantial welfare gains are possible, examples show that (a) technology transfer may be futile if a “regularity” condition is not satisfied and (b) cheap talk may be useless if the language for communication is not sufficiently rich.     

Public Good Provision Under Monopolistic Competition

This paper presents a model of voluntary private provision of public good under monopolistic competition following Pecorino. Consumers prefer product varieties and a public good. Marginal utility of income depends inversely upon the aggregate consumption of private goods in this model. As population size increases, aggregate consumption of private goods goes up and marginal utility of income falls. This explains the positive relationship between population size and public good provision. Any technological changes in the production of private goods are shown to be neutral to the aggregate provision of public good. These results are in contrast to Pecorino.     

Chores

We analyze situations where the provision of each of c public goods must be voluntarily assumed by exactly one of n private agents in the absence of transfer schemes or binding contracts. We model this problem as a complete information, potentially infinite horizon game where n agents simultaneously wage c wars of attrition. Providing a public good commits an agent not to take on the provision of another public good for a fixed period. We explore the strategic trade-offs that this commitment ability and the multiplicity of tasks provide. Subgame perfect equilibria (SPEs) are characterized completely for games with two agents and two public goods. For games with two identical agents and c > 1 identical public goods, we establish that an equilibrium that yields a surplus-maximizing outcome always exists and we provide sufficient conditions under which it is the unique equilibrium outcome. We show that under mild conditions, the surplus-maximizing SPE is the unique symmetric SPE. Journal of Economic Literature Classification Number: H41, C72, D13.     

A STABLE NASH MECHANISM FOR QUASI-ADDITIVE PUBLIC-GOOD ENVIRONMENTS*

In this paper we present a simple game form implementing Lindahl allocations as Nash equilibrium outcomes, which has nice stability properties. we show that if the preferences of eaach consumer are representable by a utility function of the form a(y)x_i+b_i(y), where x_i(y), where x_i is the amount of private good and y, the amount of public good, then the Nash equilibrium of our geme is locally stable under the gradient adjustment process. This restriction on the preferences has been known in hte literature as the necessary and sufficient condition for the Pareto optimal amount of pukic goods to be independent of the private goods distribution. This type of preference includes quasi-linear preferences as a special case. but unlike quasi-linearity, this allows a non zero income effect of demand for public goods as well as private goods, which is often supported by empirical evidence. Our result shows how an equilbirium can be achieved over time by a decentralized strategy adjustement process for a fairly general class of environments, even in the absence of a dominant-strategy equilibrium.     

Reliability of individual valuations of public and private goods: Choice consistency, response time, and preference refinement

We examined the reliability of a large set of paired comparison value judgments involving public goods, private goods, and sums of money. As respondents progressed through a random sequence of paired choices they were each given, their response time decreased and they became more consistent, apparently fine-tuning their responses, suggesting that respondents tend to begin a hypothetical value exercise with relatively imprecise preferences and that experience in expressing preference helps reduce that imprecision. Reliability was greater for private than for public good choices, and greater for choices between a good and a monetary amount than for choices between two goods. However, the reliability for public good choices was only slightly lower than for the private goods.