Compensated Lindahl Equilibrium : Efficiency Theorems and Gains from Trade with Individual Production and Public Goods

In general equilibrium theory for private good economies, possible discontinuities in budget correspondences create obstacles to decentralizing Pareto efficient allocations, as well as to existence of Walrasian equilibrium with gains from trade. Then McKenzie's (1957) notion of compensated demand, and the associated notion of compensated Walrasian equilibrium, are important tools for surmounting such obstacles. Here, for economies that include public goods along with both individual and public production, we provide analogous results for a compensated notion of Lindahl equilibrium