Existence, Uniqueness and Some Comparative Statics for Ratio- and Lindahl Equilibria: New Wine in Old Bottles
CESifo, Munich, 2006
CESifo Working Paper No. 1802
We present a rigorous, yet elementary, demonstration of the existence of a unique Lindahl equilibrium under the assumptions that characterize the standard n-player public good model. Indeed, our approach, which exploits the aggregative structure of the public good model, lends itself to a transparent geometric representation. Moreover, it can handle the more general concept of the cost-share or ratio equilibrium. Finally, we indicate how it may be ex-ploited to facilitate comparative static analysis of Lindahl and cost share equilibria.
Public Finance