Share This Article:

Two-Part Tariff Lottery: A Means to Provide Public Good at the Social Optimum

Abstract Full-Text HTML XML Download Download as PDF (Size:252KB) PP. 31-39
DOI: 10.4236/tel.2012.21006    3,396 Downloads   6,542 Views  

ABSTRACT

Pure public goods provided by charitable organizations may be provided at the first-best level when the provision is financed by an appropriately designed lottery. If lottery tickets are sold using a two-part tariff, the level of provision of the public good is greater than when fees are not charged to participate in the lottery. Unlike [13] who asymptotically approach the first-best level of provision with an arbitrarily large prize, a Pareto efficient level of the public good is produced when participation fees for the lottery are set appropriately.

Conflicts of Interest

The authors declare no conflicts of interest.

Cite this paper

A. Apinunmahakul and V. Barham, "Two-Part Tariff Lottery: A Means to Provide Public Good at the Social Optimum," Theoretical Economics Letters, Vol. 2 No. 1, 2012, pp. 31-39. doi: 10.4236/tel.2012.21006.

References

[1] P. A. Samuelson, “The Pure Theory of Public Expenditure,” Review of Economics and Statistics, Vol. 36, No. 4, 1954, pp. 387-389. doi:10.2307/1925895
[2] P. Van Parijs, “Real Freedom for All: What (If Anything) Can Justify Capitalism?” Oxford Political Theory Series, Oxford University Press, Clarendon Press, Oxford and New York, 1995, p. xii, 330.
[3] E. Lindahl, “Just Taxation—A Positive Solution,” In: R. A. Musgrave and A. T. Peacock, Eds., Classic in the Theory of Public Finance, Macmillan, London, 1967, pp. 168-176.
[4] J. Green and J. J. Laffont, “Incentives in Public Decision Making,” North-Holland, Amsterdam, 1979.
[5] H. Moulin, “Serial Cost-Sharing of Excludable Public Goods,” The Review of Economic Studies, Vol. 61, No. 2, 1994, pp. 305-325. doi:10.2307/2297983
[6] M. Olson, “The Logic of Collective Action,” Harvard University Press, Cambridge, 1965.
[7] T. Bergstrom, L. Blume and H. Varian, “On the Private Provision of Public Goods,” Journal of Public Economics, Vol. 29, No. 1, 1986, pp. 25-49. doi:10.1016/0047-2727(86)90024-1
[8] R. Boadway, P. Pestieau and D. Wildasin, “Tax-Transfer Policies and the Voluntary Provision of Public Goods,” Journal of Public Economics, Vol. 39, No. 3, 1989, pp. 157-176. doi:10.1016/0047-2727(89)90038-8
[9] M. Bilodeau and A. Slivinski, “Toilet Cleaning and Department Chairing: Volunteering a Public Service,” Journal of Public Economics, Vol. 59, No. 3, 1996, pp. 299-308. doi:10.1016/0047-2727(94)01494-9
[10] C. Fershtman and S. Nitzan, “Dynamic Voluntary Provision of Public Goods,” European Economic Review, Vol. 35, No. 5, 1991, pp. 1057-1067. doi:10.1016/0014-2921(91)90004-3
[11] M. Gradstein, “Time Dynamics and Incomplete Information in the Private Provision of Public Goods,” Journal of Political Economy, Vol. 100, No. 3, 1992, pp. 581-597. doi:10.1086/261830
[12] H. R. Varian, “Sequential Contribu-tions to Public Goods,” Journal of Public Economics, Vol. 53, No. 2, 1994, pp. 165-186. doi:10.1016/0047-2727(94)90019-1
[13] J. Morgan, “Financing Public Goods by Means of Lotteries,” Review of Economic Studies, Vol. 67, No. 4, 2000, pp. 761-784. doi:10.1111/1467-937X.00153
[14] B, Duncan, “Financing Charitable Organizations and Non-Profit Firms,” Ph.D. Disser-tation, University of California, Santa Barbara, 1998.

  
comments powered by Disqus

Copyright © 2018 by authors and Scientific Research Publishing Inc.

Creative Commons License

This work and the related PDF file are licensed under a Creative Commons Attribution 4.0 International License.