A Core‐Equilibrium Convergence in a Public Goods Economy
N Allouch - Journal of Public Economic Theory, 2010 - Wiley Online Library
Journal of Public Economic Theory, 2010•Wiley Online Library
This paper shows a core‐equilibrium convergence in a public goods economy where
consumers' preferences display warm glow effects. We demonstrate that if each consumer
becomes satiated to other consumers' provision, then as the economy grows large the core
shrinks to the set of Edgeworth allocations. Moreover, we show that an Edgeworth allocation
can be decentralized as a warm glow equilibrium.
consumers' preferences display warm glow effects. We demonstrate that if each consumer
becomes satiated to other consumers' provision, then as the economy grows large the core
shrinks to the set of Edgeworth allocations. Moreover, we show that an Edgeworth allocation
can be decentralized as a warm glow equilibrium.
Abstract
This paper shows a core‐equilibrium convergence in a public goods economy where consumers' preferences display warm glow effects. We demonstrate that if each consumer becomes satiated to other consumers' provision, then as the economy grows large the core shrinks to the set of Edgeworth allocations. Moreover, we show that an Edgeworth allocation can be decentralized as a warm glow equilibrium.
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