北京大学：《微观经济学》Chapter Thirty-Five Public Goods 公共物品

Chapter thirty-Five Public goods 公共物品

Chapter Thirty-Five Public Goods 公共物品

Structure Definition When to provide a public good Efficient provision Private provision: free-riding Variable quantities of public good Efficient amount Free-riding problem How to provide public goods? Demand revelation

Structure Definition When to provide a public good – Efficient provision – Private provision: free-riding Variable quantities of public good – Efficient amount – Free-riding problem How to provide public goods? Demand revelation

Public goods - Definition a good is purely public if it is both nonexcludable(非排他性)and nonrival(非争性) in consumption Nonexcludable s all consumers can consume the good Nonrival a each consumer can consume all of the good

Public Goods -- Definition A good is purely public if it is both nonexcludable (非排他性)and nonrival(非争性) in consumption. –Nonexcludable -- all consumers can consume the good. –Nonrival -- each consumer can consume all of the good

Public Goods -Examples Broadcast radio and tv programs National defense Public highways Reductions in air pollution National parks

Public Goods -- Examples Broadcast radio and TV programs. National defense. Public highways. Reductions in air pollution. National parks

Reservation prices A consumer's reservation price for a unit of a good is his maximum willingness-to-pay for it Consumers wealth is w Utility of not having the good is U(w,0)

Reservation Prices A consumer’s reservation price for a unit of a good is his maximum willingness-to-pay for it. Consumer’s wealth is Utility of not having the good is U(w,0). w

Reservation prices A consumer's reservation price for a unit of a good is his maximum willingness-to-pay for it Consumers wealth is w Utility of not having the good is U(w,0) Utility of paying p for the good is U(-p,1

Reservation Prices A consumer’s reservation price for a unit of a good is his maximum willingness-to-pay for it. Consumer’s wealth is Utility of not having the good is Utility of paying p for the good is U(w,0). w. U(w − p,1)

Reservation prices A consumer's reservation price for a unit of a good is his maximum willingness-to-pay for it Consumers wealth is w Utility of not having the good is U(w,0) Utility of paying p for the good is U(-p,1) Reservation price r is defined by U(w,0)=U(形-r,1)

Reservation Prices A consumer’s reservation price for a unit of a good is his maximum willingness-to-pay for it. Consumer’s wealth is Utility of not having the good is Utility of paying p for the good is Reservation price r is defined by U(w,0). w. U(w − p,1). U(w,0) = U(w − r,1)

Reservation Prices: An Example Consumer's utility is U(x1, x2)=xI(*2+1) Utility of not buying a unit of good 2 is U/(w,0)=w(0+1)=w Utility of buying one unit of good 2 at price p is U(w-P,1)=(w-p)(1+1)=2(W-p)

Reservation Prices; An Example Consumer’s utility is U(x , x ) x (x ). 1 2 = 1 2 + 1 Utility of not buying a unit of good 2 is U w w w ( ,0) (0 1) . = + = Utility of buying one unit of good 2 at price p is U w p w p w p ( ,1) ( )(1 1) 2( ). − = − + = −

Reservation Prices: An Example Reservation price r is defined by U(,0)=U/(v-r,1) L.e. by v=2(W-r)→r 2

Reservation Prices; An Example Reservation price r is defined by U w U w r ( ,0) ( ,1) = − I.e. by 2( ) . 2 w w w r r = −  =

When should a public good Be Provided? One unit of the good costs c Two consumers, a and B Individual payments for providing the public good are ga and gB gA+ gBc if the good is to be provided

When Should a Public Good Be Provided? One unit of the good costs c. Two consumers, A and B. Individual payments for providing the public good are gA and gB. gA + gB  c if the good is to be provided