A utilitarian approach to the provision and pricing of excludable public goods |
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| Affiliation: | 1. Faculty of Chemistry, Razi University, Kermanshah 671496734, Iran;2. Laboratorio de Desarrollo Analítico y Quimiometría (LADAQ), Cátedra de Química Analítica I, Universidad Nacional del Litoral, Ciudad Universitaria, CC 242, S3000ZAA Santa Fe, Argentina;3. Quality & Technology, Department of Food Science, Faculty of Science, University of Copenhagen, Copenhagen, Denmark;4. Department of Biology, Faculty of Science, Razi University, Kermanshah, Iran;1. Key Laboratory of Experimental Marine Biology, Institute of Oceanology, Chinese Academy of Sciences, Qingdao, 266071, China;2. University of Chinese Academy of Sciences, Beijing, 100039 China;1. Department of Food Science, Aarhus University, Aarhus, Tjele, Denmark;2. Competence Center of Food and Fermentation Technologies, Tallinn, Estonia;3. Department of Food Processing, Tallinn University of Technology, Tallinn, Estonia;1. Division of Economics, Nanyang Technological University, HSS–04-58, 14 Nanyang Drive, Singapore 637332, Singapore;2. Department of Economics, Cornell University, 404 Uris Hall, Ithaca, NY 14853, United States;1. Department of Molecular Biology, Institute of Genetics & Hospital for Genetic Diseases, Osmania University, Begumpet, Hyderabad, India;2. Department of Biotechnology, KL University, Green Fields, Vaddeswaram, Andhra Pradesh, India;3. Department of Medicine, Cardiovascular Research Center, Medical College of Wisconsin, Milwaukee, USA;4. Department of Biochemistry, Kakatiya University, Vidyaranyapuri, Warangal 506009, Andhra Pradesh, India |
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| Abstract: | This paper studies utilitarian welfare maximization in a large economy with an excludable public good where individual preferences are private information. If inequality aversion is large, optimal allocations involve the use of admission fees and exclusion to redistribute resources from people who benefit a lot from the public good to people who benefit little. If inequality aversion is close to zero, optimal admission fees are zero. Because of inequality aversion, information rents of people who benefit a lot from the public good receive less weight, so optimal provision levels for the public good are below first-best levels. |
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