“Voluntary Contributions to Multiple Public Goods in a Production Economy with Widespread Externalities” by Fan-chin KUNG
Institute of Economics Academia Sinica, Taiwan
In a production economy, multiple public goods are produced by firms in competitive markets, and provided by the government together with contributions from consumers. There are widespread externalities: all consumers’ consumption and contributions and all firms’ production enter into utility functions. Public goods can be imperfectly substitutes or complements, and they can be coalition or club goods. Zero bounds that require consumers to make nonnegative contributions complicate the differentiable approach. Applying parametric transversality theorem for smooth economies in a regular parameterization, we obtain the existence of a contribution equilibrium and generic regularity of equilibria.