One-sided private provision of public goods with implicit Lindahl pricing

Meier, Volker (2010): One-sided private provision of public goods with implicit Lindahl pricing. CESifo Working Paper: Public Finance,

Abstract

We consider a sequential game in which one player produces a public good and the other player can influence this decision by making an unconditional transfer. An efficient allocation requires the Lindahl property: the sum of the two (implicit) individual prices has to be equal to the resource cost of the public good. Under mild conditions this requires a personal price for the providing player that lies below half of the resource cost. These results can, for example, justify high marginal taxes on wages of secondary earners.

• Item Type: Paper
• Faculties: Economics; Economics > Chairs > Chair for Public Economics
• Subjects: 300 Social sciences > 330 Economics
• Language: English