On the private provision of public goods

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Abstract

We consider a general model of the non-cooperative provision of a public good. Under very weak assumptions there will always exist a unique Nash equilibrium in our model. A small redistribution of wealth among the contributing consumers will not change the equilibrium amount of the public good. However, larger redistributions of wealth will change the set of contributors and thereby change the equilibrium provision of the public good. We are able to characterize the properties and the comparative statics of the equilibrium in a quite complete way and to analyze the extent to which government provision of a public good ‘crowds out’ private contributions.

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    ∗

    This work was supported in part by the National Science Foundation. We wish to thank Joseph Greenberg, Peter Hartley, Jonathan Pincus, Russell Roberts, and an anonymous referee for helpful comments.

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    Copyright © 1986 Published by Elsevier B.V.