On the Private Production of Public Goods

The main concern of the present study is the investigation of some welfare aspects of private provision of exclusive public goods which were neglected in the existing literature dealing with this subject. In particular, we demonstrate that the particular attributes of a public which make it possible for all [to] enjoy in common in the sense that each individual's consumption of such leads to no subtraction from any other individual's consumption of that good [Samuelson, 1954, p. 387] necessitates a non-competitive market or? ganization.1 Moreover, contrary to the private case, imperfect competition in the market for privately-produced public results in over-production. This proposition is independent of consideration of Pareto-Optimality in the allocation of the public among members of the community. A formal exposition of the arguments is offered in Section I. Section II deals with a somewhat more complicated problem suggested by the possibility of product differentiation.2 Analytically this problem possesses the same general features as the homogenous product case. The main proposition regarding product differentiation of public goods is that its social costs exceed the corresponding private costs, which implies overproduction of public differentiation. Section III summarizes the main conclusions and provides some further re? flections on the role of government in the provision of exclusive public goods

Competition (biology) · Consumption (sociology) · Economics · Government (linguistics) · Imperfect · Imperfect competition · Market failure · Microeconomics · Private good · Product (mathematics) · Product market · Production (economics) · Proposition · Public economics · Public good · Sociology · Economic theories and models · Economic Theory and Institutions · Fiscal Policy and Economic Growth

• The Fragile Nature of Public Goods Equilibria

  Robert B Ekelund•Review of Social Economy•1977

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• Public Goods Definitions and their Institutional Context

  Tyler Cowen•Review of Social Economy•1985

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• The Perfectly Competitive Production of Collective Goods

  Earl A Thompson•The Review of Economics and…•1969

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• Aspects of Public Expenditure Theories

  Paul A Samuelson•The Review of Economics and…•1958

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• The Pure Theory of Public Expenditure

  Paul A Samuelson•The Review of Economics and…•1954

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• The Perfectly Competitive Production of Collective Goods

  Bruce M Owen•The Review of Economics and…•1969

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• The Perfectly Competitive Production of Collective Goods

  Earl A Thompson•The Review of Economics and…•1968

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