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Lindahl Mechanisms and Free Riders
Martin J. Bailey
Vol. 80, No. 1/2 (1994), pp. 35-39
Published by: Springer
Stable URL: http://www.jstor.org/stable/30026903
Page Count: 5
You can always find the topics here!Topics: Taxes, Public goods, Auctioneers, Games, Utility functions, Nash equilibrium, Prices, Free rider effect, Private goods, Mechanical properties
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Several authors have proposed mechanisms whose Nash-equilibria yield Lindahl tax allocations; however, as is well known, so does the Lindahl procedure with an auctioneer. Moreover, the game forms of all these mechanisms, and of any as yet undiscovered such mechanism, all have the same normal form as does the Lindahl procedure without an auctioneer. The manipulative Nash equilibria are consequently the same for all these mechanisms, so that all have the traditional free-rider problem and all have the same outcome under strategic behavior.
Public Choice © 1994 Springer