Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/38998
Authors: 
Buchholz, Wolfgang
Peters, Wolfgang
Year of Publication: 
2010
Series/Report no.: 
CESifo working paper Public Finance 3113
Abstract: 
In this paper we explore the relationship between an equitable distribution of the cost shares in public-good provision on the one hand and the core property of an allocation on the other. In particular we show that it is an inhomogeneous distribution of cost shares that motivates some coalition of agents to separate and to block an initially given Pareto optimal allocation which can be interpreted as the outcome of a negotiation process when all agents form a grand coalition. Distributional equity of the individual burdens of public-good contribution is assessed by a specific sacrifice measure (the 'Moulin sacrifice') which is derived from the egalitarian-equivalent concept suggested by Moulin (1987). We also develop a simple core test by which it can be checked whether a given allocation is in the core thus being a possible outcome of a cooperative agreement in the public-good economy.
Subjects: 
public goods
core
equity
stability of cooperation
JEL: 
C71
D63
H41
Document Type: 
Working Paper

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