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Social and Behavioral Sciences Commons

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Economics

Selected Works

Ted C Bergstrom

1983

Public Finance

Articles 1 - 2 of 2

Full-Text Articles in Social and Behavioral Sciences

Independence Of Allocative Efficiency From Distribution In The Theory Of Public Goods, Ted Bergstrom, Richard Cornes Oct 1983

Independence Of Allocative Efficiency From Distribution In The Theory Of Public Goods, Ted Bergstrom, Richard Cornes

Ted C Bergstrom

When is the Pareto optimal amount of public goods independent of income distribution? Subject to some regularity conditions, the answer is when preferences of every individual i can be represented by a utility function of the form U(X_i,Y)=A(Y)X_i+B_i(Y) where X_i is i's consumption of private goods and Y is the amount of public goods.


Counting Groves-Ledyard Equilibria Via Degree Theory, Ted Bergstrom, Carl Simon, Charles Titus Jan 1983

Counting Groves-Ledyard Equilibria Via Degree Theory, Ted Bergstrom, Carl Simon, Charles Titus

Ted C Bergstrom

A Nash equilibria of the Groves-Ledyard mechanism is Pareto optimal. But this may not be much use if there are many distinct Nash equilibria, since it is not clear that the mechanism would converge on any one of them. This paper shows that if preferences are quasi-linear, the Groves-Ledyard mechanism has a unique Nash equilibrium, but even in the simplest class of preferences in which demands for public goods are affected by incomes, the number of equilibria increases exponentially with the number of consumers. The paper makes use of some pretty mathematics and even sports a drawing of Whitney's umbrella.