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On Efficient Provision Of Social Overhead Goods, Ted Bergstrom
On Efficient Provision Of Social Overhead Goods, Ted Bergstrom
Ted C Bergstrom
This paper was my attempt to build a theory of "public factors of production" such as scientific knowledge and to see whether there is any way that Arrow-Debreu general equilibrium theory can cope with the nonconvexities that arise. I propose that the economy might be partitioned into provision of "social overhead goods" and ordinary goods in such a way that given the quantities of social overhead goods, the remaining activities satisfy the assumptions needed for the existence of competitive equilibrium. I proposed and examined a notion of "Lindahl-Hotelling equilibrium" in which individuals were assigned Lindahl prices for the social overhead …