Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/185436
Authors: 
Bierbrauer, Felix
Winkelmann, Justus
Year of Publication: 
2018
Series/Report no.: 
CESifo Working Paper No. 7238
Abstract: 
We study the provision of public goods. Different public goods can be bundled provided there is enough capacity, i.e. resources to pay for all the public goods in the bundle. The analysis focuses on the all-or-nothing-mechanism: Expand provision as much as 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. We also 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.
Subjects: 
public goods
bundling
state capacity
mechanism design
JEL: 
D79
D82
H41
Document Type: 
Working Paper

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