Review of Economic Studies Vol. 70 No. 3 2003
Public-Good Provision with Many Participants
Abstract
For a nonexcludable public good with benefit and cost functions independent of the number of participants, this paper studies second-best allocations under Bayesian interim incentive compatibility and interim individual rationality. As the number of participants becomes large, second-best provision levels converge in distribution to first-best levels if the latter are bounded. Second-best provision levels become large in absolute terms but small relative to first-best levels if benefit and cost functions are isoelastic. In contrast, for an excludable public good, the ratio of second-best to first-best levels is bounded away from zero. Copyright The Review of Economic Studies Limited, 2003.
- DOI
- 10.1111/1467-937x.00257
- Volume
- 70
- Issue
- 3
- Pages
- 589-614
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref