Mueller, Daniel and Schmitz, Patrick W. (2017). Optimal ownership of public goods in the presence of transaction costs. Econ. Lett., 152. S. 88 - 93. LAUSANNE: ELSEVIER SCIENCE SA. ISSN 1873-7374

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Abstract

A non-governmental organization (NGO) can make a non-contractible investment to provide a public good. Only ownership can be specified ex ante, so ex post efficiency requires reaching an agreement with the government. Besley and Ghatak (2001) argue that the party with the larger valuation should be the owner. We show that when transaction costs have to be incurred before the bargaining stage can be reached, ownership by the government can be optimal even when the NGO has a larger valuation. Our finding also contrasts with the standard private-good setup where the investing party (i.e., the NGO) should always be the owner. (C) 2017 The Authors. Published by Elsevier B.V.

Item Type: Journal Article
Creators:
CreatorsEmailORCIDORCID Put Code
Mueller, DanielUNSPECIFIEDUNSPECIFIEDUNSPECIFIED
Schmitz, Patrick W.UNSPECIFIEDUNSPECIFIEDUNSPECIFIED
URN: urn:nbn:de:hbz:38-238476
DOI: 10.1016/j.econlet.2017.01.011
Journal or Publication Title: Econ. Lett.
Volume: 152
Page Range: S. 88 - 93
Date: 2017
Publisher: ELSEVIER SCIENCE SA
Place of Publication: LAUSANNE
ISSN: 1873-7374
Language: English
Faculty: Unspecified
Divisions: Unspecified
Subjects: no entry
Uncontrolled Keywords:
KeywordsLanguage
PRIVATE OWNERSHIP; PROPERTY-RIGHTS; FIRM; GOVERNMENTMultiple languages
EconomicsMultiple languages
Refereed: Yes
URI: http://kups.ub.uni-koeln.de/id/eprint/23847

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