Universität zu Köln

Bierbrauer, Felix ORCID: 0000-0003-3879-9607 and Winkelmann, Justus (2020). All or nothing: State capacity and optimal public goods provision. J. Econ. Theory, 185. SAN DIEGO: ACADEMIC PRESS INC ELSEVIER SCIENCE. ISSN 1095-7235

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Abstract

We study public goods provision subject to ex post incentive and participation constraints. We also impose a requirement of anonymity. Different public goods can be bundled if sufficient resources are available. The analysis focuses on the all-or-nothing-mechanism: Expand provision as much as is resource feasible if no one vetoes - otherwise stick to the status quo. We show that the probability of the all-outcome converges to one as the capacity becomes unbounded. For a given finite capacity, we provide conditions under which the all-or-nothing-mechanism is ex ante welfare-maximizing - even though, ex post, it involves an overprovision of public goods. (C) 2019 Elsevier Inc. All rights reserved.

Item Type:	Journal Article
Creators:	Creators Email ORCID ORCID Put Code Bierbrauer, Felix UNSPECIFIED orcid.org/0000-0003-3879-9607 UNSPECIFIED Winkelmann, Justus UNSPECIFIED UNSPECIFIED UNSPECIFIED
URN:	urn:nbn:de:hbz:38-351900
DOI:	10.1016/j.jet.2019.104955
Journal or Publication Title:	J. Econ. Theory
Volume:	185
Date:	2020
Publisher:	ACADEMIC PRESS INC ELSEVIER SCIENCE
Place of Publication:	SAN DIEGO
ISSN:	1095-7235
Language:	English
Faculty:	Faculty of Management, Economy and Social Sciences
Divisions:	Center of Excellence C-SEB Faculty of Management, Economics and Social Sciences > Economics > Macroeconomic, Financial and Economic Policy > Professorship for Macroeconomic
Subjects:	Economics
Uncontrolled Keywords:	Keywords Language MECHANISMS; RAILROADS; GROWTH Multiple languages Economics Multiple languages
Refereed:	Yes
URI:	http://kups.ub.uni-koeln.de/id/eprint/35190