The model identifies the quality of a network product with the number of consumers using it. Hence, the producer cannot unilaterally control the quality of his product. Using the preference specification of vertical quality differentiation, it is shown that the largest network produced will be...

This paper recommends a system of rewards for public officials which is linearly related to the performance of the official. The main advantage of such a system of compensation is that it serves as a regular ‘self checking’ of the performance of an official and it reduces the need for a...

Lindahl and Nash equilibria are often used in the theory of public good. Shitovitz and Spiegel (1998) present an example of 2-person economy with one private good and one pure public good, where the core efficient Lindahl allocation does not Pareto dominate the (inefficient) Nash allocation. In...

In this paper, charity is considered as a strategic selfish activity that increases the welfare of the contributors without altruism. The model supposes the interactive simultaneous utility maximization of two consumer groups, contributors and recipients, who share the same utility function but...

Using a general equilibrium framework, this paper analyzes the equilibrium provision of a pure public bad commodity (for example pollution). Considering a finite economy with one desired private good and one pure public “bad” we explicitly introduce the concept of Lindahl equilibrium and the...

Shitovitz and Spiegel (1998) demonstrated that in pure public good economies, for some consumers the Lindahl consumption bundles can be inferior (utility-wise) to their Cournot-Nash allocation. In this paper, we prove that in any finite pure public good economy there exists a core allocation...