Hostname: page-component-78c5997874-4rdpn Total loading time: 0 Render date: 2024-11-10T13:06:04.575Z Has data issue: false hasContentIssue false
  • English
  • Français

Voluntary Provision of a Public Good in a Strategic Market Game

Published online by Cambridge University Press:  09 January 2015

Somdeb Lahiri
Get access

Summary

The purpose of this paper is to investigate the mutual compatibility of voluntary provision of public good and strategic behavior of consumers in the market for private goods. We study the existence of equilibrium private provision of a public good within general strategic equilibrium framework with a finite number of players. The mechanism for the provision of public good follows the one due to Bergstrom, Blume and Varian (1986) and the trading mechanism for private goods follows the strategic market game with wash sales due to Dubey and Shubik (1986). The new result of the paper is the demonstration of existence of an equilibrium point in pure strategies for finite number of players. Due to the existence of trivial equilibria at which all markets are closed, equilibrium points are constructed as limits of sequences of ε- equilibria of perturbed games.

L'objectif de cet article est d'étudier la compatibilité entre la mise à disposition volontaire d'un bien public et les comportements stratégiques des consommateurs sur un marché avec des biens privés. Nous étudions l'existence d'un équilibre pour lequel la fourniture du bien public est réalisée de manière privée dans un modèle avec interactions stratégiques entre un nombre fini d'agents. Le mécanisme de fourniture du bien public s'inspire du modèle de Bergstrom, Blume et Varian (1986), et le mécanisme d'échange pour les biens privés relève des jeux de marché avec transactions blanches de Dubey et Shubik (1986). L'apport de cet article réside dans une démonstration d'existence d'un point d'équilibre en stratégies pures pour un nombre fini d'agents. Dans la mesure où les équilibres triviaux sont possibles, cet équilibre est construit comme la limite de séquences d'équilibres du jeu perturbé.

Keywords

strategic market gamepublic goodequilibrium pointsC72D43H41jeu stratégique de marchébien publicpoint d'équilibreC72D43H41
Type
Research Article
Information
Recherches Économiques de Louvain/ Louvain Economic Review , Volume 79 , Issue 4 , December 2013 , pp. 45 - 73
Copyright
Copyright © Université catholique de Louvain, Institut de recherches économiques et sociales 2013 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Amir, R., Sahi, S., Shubik, M. and Yao, S. (1990): “A strategic market game with complete markets”, Journal of Economic Theory 51, 123–141.Google Scholar
Bagnoli, M. and Lipman, B. (1989): “Provision of public goods: Fully implementing the core through private contributions”, Review of Economic Studies 56, 583–601 Google Scholar
Bergstrom, T., Blume, L. and Varian, H. (1986): “On the private provision of public goods”, Journal of Public Economics 29, 25–49.Google Scholar
Bloch, F. and Ferrer, H. (2001): “Trade fragmentation and coordination in strategic market games”, Journal of Economic Theory 101, 301–316.Google Scholar
Corchon, L.C. and Wilkie, S. (1996): “Doubly implementing the ratio correspondence by means of a natural mechanism”, Mimeo Bellcore and U. de Alicante.Google Scholar
Dubey, P. and Shubik, M. (1978): “The non-cooperative equilibria of a closed trading economy with market supply and bidding strategies”, Journal of Economic Theory 17, 1–20.Google Scholar
Faias, M., Moreno, E. and Wooders, M. (2012): “A strategic market game approach for the private provision of public goods”, University Library of Munich, Germany No. 37777.Google Scholar
Gabszewicz, J. J. and Michel, P. (1997): “Oligopoly equilibrium in exchange economies”, in Eaton, B.C. and Harris, R. G., (Eds.) Trade, technology and economics: Essays in honor of Richard G. Lipsey, Elgar, Cheltenham, UK.Google Scholar
Giraud, G. (2003): “Strategic market games: An introduction”, Journal of Mathematical Economics, 39, 355–375.Google Scholar
Giraud, G. and Stahn, H. (2008): ‘On Shapley-Shubik equilibria with financial markets”, Economic Theory 35, 469–496.Google Scholar
Peck, J. and Shell, K. (1985): “Market uncertainty: Sunspot equilibria in imperfectly competitive economies”, CARESS Working Paper #85-21.Google Scholar
Peck, J., Shell, K. and Spear, S. (1992): “The market game: Existence and structure of equilibrium”, Journal of Mathematical Economics 21, 271–299.Google Scholar
Shapley, L.S. (1976): “Non-cooperative general exchange”, in Lin, S.A.Y. (ed.), Theory of measurement of economic externalities, Academic Press, New York.Google Scholar
Shapley, L.S. and Shubik, M. (1977): “Trade using one commodity as a means of payment”, Journal of Political Economy 85, 937–968.Google Scholar
Shubik, M. (1973): “Commodity money, oligopoly, credit and bankruptcy in a general equilibrium model”, Western Economic Journal 11, 24–38.Google Scholar