Arbeitspapier

Incomplete contracts and excludable public goods

We study the provision of an excludable public good to discuss whether the imposition of participation constraints is desirable. It is shown that this question may equivalently be cast as follows: should a firm that produces a public good receive tax revenues, or face a self-financing requirement. The main result is that the desirability of participation constraints is shaped by an equity-efficiency tradeoff: While first-best is out of reach with participation constraints, their imposition yields a more equitable distribution of the surplus. This result relies on an incomplete contracts perspective. With a benevolent mechanism designer, participation constraints are never desirable.

Sprache
Englisch

Erschienen in
Series: Preprints of the Max Planck Institute for Research on Collective Goods ; No. 2010,01

Klassifikation
Wirtschaft
Asymmetric and Private Information; Mechanism Design
Economics of Contract: Theory
Public Goods
Economics of Regulation
Thema
Mechanism Design
Incomplete Contracts
Public Goods
Regulation

Ereignis
Geistige Schöpfung
(wer)
Bierbrauer, Felix
Ereignis
Veröffentlichung
(wer)
Max Planck Institute for Research on Collective Goods
(wo)
Bonn
(wann)
2010

Handle
Letzte Aktualisierung
20.09.2024, 08:23 MESZ

Datenpartner

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Objekttyp

  • Arbeitspapier

Beteiligte

  • Bierbrauer, Felix
  • Max Planck Institute for Research on Collective Goods

Entstanden

  • 2010

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