Resource title

The provision and pricing of excludable public goods: Ramsey-Boiteux Pricing versus bundling

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Resource description

This paper studies the relation between Bayesian mechanism de- sign and the Ramsey-Boiteux approach to the provision and pricing of excludable public goods. For a large economy with private informa- tion about individual preferences, the two approaches are shown to be equivalent if and only if, in addition to incentive compatibility and par- ticipation constraints, the nal allocation of private-good consumption and admission tickets to public goods satis es a condition of renegoti- ation proofness. Without this condition, a mechanism involving mixed bundling, i.e. combination tickets at a discount, is superior.

Resource author

Martin Hellwig

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Resource language

eng

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text/html

Resource resource URL

http://hdl.handle.net/10419/26905

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Adapt according to the presented license agreement and reference the original author.