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Investment in local public services: Nash equilibrium and social optimum

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Cremer, Helmuth [UCL] Marchand, Maurice [UCL] Pestieau, Pierre [UCL]

Within a two-community setting, we study the optimal provision of a local public good which is indivisible and generates interjurisdictional spillovers. Each community has to decide whether or not to invest in this public good, The resulting Nash equilibrium is compared with an optimal solution based on a Benthamian welfare function, We then analyze to what extent conditional grants are able to restore optimality when needed. (C) 1997 Elsevier Science S.A.

Document type Article de périodique (Journal article) – Article de recherche
Access type Accès restreint
Publication date 1997
Language Anglais
Journal information "Journal of Public Economics" - Vol. 65, no. 1, p. 23-35 (1997)
Peer reviewed yes
Publisher Elsevier Science Sa Lausanne (Lausanne)
issn 0047-2727
Publication status Publié
Affiliation UCL
Links
Bibliographic reference Cremer, Helmuth ; Marchand, Maurice ; Pestieau, Pierre. Investment in local public services: Nash equilibrium and social optimum. In: Journal of Public Economics, Vol. 65, no. 1, p. 23-35 (1997)
Permanent URL http://hdl.handle.net/2078.1/46651