SFB 303 Discussion Paper No. B - 200

Author: Valery Vasil'ev, Shlomo Weber und Hans Wiesmeth
Title: The Equivalence of Core and Lindahl Equilibria in an Economy with Semi-Public Goods
Abstract: This paper examines a model of an infinite production economy with a finite number of types of agents and semi-public goods, where utility of a member of a coalition depends not only on the vector of public commodities produced by this coalition, but also on the structure of the coalition. The public goods are thus subjected to crowding and exclusion is possible. The main purpose of the paper is then to derive necessary and sufficient conditions on the degrees of congestion which guarantee the equivalence between the core and the set of equal treatment Lindahl equilibria. It is shown that the equivalence holds for economies satisfying standard assumptions if and only if there are constant returns to group size for each type of agents. The paper thus generalizes and completes other approaches to core equivalence in a public goods context.
JEL-Classification-Number: 022, 026
Creation-Date: September 1991
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