Division of the Humanities and Social Sciences California Institute of Technology Pasadena, California 91125 a Characterization of Interim Efficiency with Public Goods
نویسندگان
چکیده
We consider a Bayesian public goods environment with independent private valuations. We fully characterize interim e cient allocation rules and prove that they correspond to decision rules based on a virtual cost-bene t criterion, together with the appropriate incentive taxes. Compared to the classical Lindahl-Samuelson solution there are generally distortions that depend on the welfare weights because the e cient way to reduce the tax burden on low-valuation (resp: high-valuation) types is to reduce (resp: increase) the level of provision of the public good. JEL classi cation numbers: 024, 026
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