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- Title
Utilitarian mechanism design for an excludable public good.
- Authors
Hellwig, Martin F.
- Abstract
This paper studies the design of optimal utilitarian mechanisms for an excludable public good. Excludability provides a basis for making people pay for admissions; the payments can be used for redistribution and/or funding. Whereas previous work assumed that admissions are governed by the payment or nonpayment of a price, this paper allows for arbitrary admission rules. With sufficient inequality aversion, nondegenerate randomization in admissions is shown to be desirable for certain model specifications, with and without participation constraints. The paper also gives a sufficient condition on the distribution of preferences under which randomization is undesirable.
- Subjects
UTILITARIANISM; PUBLIC goods; PAYMENT; GOVERNMENT accounting; UTILITY theory; MATHEMATICAL models of consumption
- Publication
Economic Theory, 2010, Vol 44, Issue 3, p361
- ISSN
0938-2259
- Publication type
Article
- DOI
10.1007/s00199-009-0488-3