Premium
A Characterization of Interim Efficiency with Public Goods
Author(s) -
Ledyard John O.,
Palfrey Thomas R.
Publication year - 1999
Publication title -
econometrica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 16.7
H-Index - 199
eISSN - 1468-0262
pISSN - 0012-9682
DOI - 10.1111/1468-0262.00028
Subject(s) - interim , public good , characterization (materials science) , economics , microeconomics , political science , materials science , nanotechnology , law
We consider a Bayesian public goods environment with independent private valuations. We fully characterize interim efficient allocation rules and prove that they correspond to decision rules based on a virtual cost-benefit criterion, together with the appropriate incentive taxes. Compared to the classical Lindahl-Samuelson solution there are generally distortions that depend on the welfare weights because the efficient wayto reduce the tax burden on low-valuation (resp: high-valuation) types is ...