Optimal provision of multiple excludable public goods / Hanming Fang, Peter Norman
- NBER working paper series ; working paper no. 13797
- This paper studies the optimal provision mechanism for multiple excludable public goods when agents' valuations are private information. For a parametric class of problems with binary valuations, we demonstrate that the optimal mechanism involves bundling if a regularity condition, akin to a hazard rate condition, on the distribution of valuations is satisfied. Bundling alleviates the free riding problem in large economies in two ways: first, it may increase the asymptotic provision probability of socially efficient public goods from zero to one; second, it decreases the extent of use exclusions. If the regularity condition is violated, then the optimal solution replicates the separate provision outcome.
- "February 2008."
- Bibliography Note:
- Includes bibliographical references (pages 22-24).
- Other Forms:
- Also available in PDF from the NBER World Wide Web site (www.nber.org).
View MARC record | catkey: 4358320