Received January 1984, revised version received August 1985 | Theodore BERGSTROM, Lawrence BLUME and Hal VARIAN*
The paper by Bergstrom, Blume, and Varian explores the non-cooperative provision of public goods, focusing on the existence, uniqueness, and comparative statics of Nash equilibria. They establish that under weak assumptions, there is always a unique Nash equilibrium. Small wealth redistributions among contributing consumers do not change the equilibrium amount of the public good, but larger redistributions can alter the set of contributors and thus the equilibrium provision. The authors characterize the properties of the equilibrium and analyze how government provision of a public good can "crowd out" private contributions. They find that equalizing wealth redistributions tend to reduce voluntary provision, and that the crowding-out effect of government provision is partial if taxes collected do not exceed voluntary contributions. The paper also extends these results to multiple public goods and provides testable implications for the Nash hypothesis.The paper by Bergstrom, Blume, and Varian explores the non-cooperative provision of public goods, focusing on the existence, uniqueness, and comparative statics of Nash equilibria. They establish that under weak assumptions, there is always a unique Nash equilibrium. Small wealth redistributions among contributing consumers do not change the equilibrium amount of the public good, but larger redistributions can alter the set of contributors and thus the equilibrium provision. The authors characterize the properties of the equilibrium and analyze how government provision of a public good can "crowd out" private contributions. They find that equalizing wealth redistributions tend to reduce voluntary provision, and that the crowding-out effect of government provision is partial if taxes collected do not exceed voluntary contributions. The paper also extends these results to multiple public goods and provides testable implications for the Nash hypothesis.