Share Equilibrium in Local Public Good Economies

We define a concept of share equilibrium for local public good (or club) economies where individual members of the population may have preferences over the membership of their jurisdiction. A share equilibrium specifies one share index for each individual. These indices determine each individual’s cost shares in any jurisdiction that he might join. We demonstrate that the same axioms as those that characterize the Lindahl equilibrium, as discussed in his 1919 paper, also characterize the share equilibrium. The share equilibrium extends the notions of ratio equilibrium and cost share equilibrium (due to Kaneko 1977, Mas-Colell and Silvestre 1989) to economies with a local public good and possibly multiple jurisdictions.