scholarly journals Using a Local Public Good to Attract Representative Creative Class Members: The Inefficient Equilibrium Case

2020 ◽  
Vol 10 (01) ◽  
pp. 40-46
Author(s):  
Amitrajeet A. Batabyal ◽  
Seung Jick Yoo
Keyword(s):  
Public Good ◽  
Creative Class ◽  
Local Public Good

Monopoly versus Individual Welfare When a Local Public Good Is Used to Attract the Creative Class

2020 ◽  
pp. 016001762094608
Author(s):  
Amitrajeet A. Batabyal
Keyword(s):  
Public Good ◽  
Creative Class ◽  
Decision Problems ◽  
Individual Member ◽  
Local Public Good ◽  
City Authority ◽  
Class Member ◽  
Individual Welfare ◽  
Compare And Contrast

We study the decision problems faced by a city authority (CA) who focuses on two different objectives in her attempt to attract members of the creative class to her city by providing a local public good (LPG). First, we compute the maximum tax that a creative class member is willing to pay to enjoy the LPG on offer by living in the CA’s city. Second, assuming that the CA acts like a “monopolist” interested in maximizing the total benefit to her city, we determine the number of members N to attract to her city and the amount of the LPG L to provide so that the total benefit is maximized. Third, supposing that the CA maximizes the welfare of an individual member, we ascertain the values of N and L that maximize this individual welfare. Finally, we compare and contrast the outcomes that arise from the CA’s focus on these two distinct objectives.

scholarly journals The Evolution of Networks and Local Public Good Provision: A Potential Approach

Games ◽  
2021 ◽  
Vol 12 (3) ◽  
pp. 55
Author(s):  
Markus Kinateder ◽  
Luca Paolo Merlino
Keyword(s):  
Public Good ◽  
Nash Equilibria ◽  
Potential Game ◽  
Public Good Provision ◽  
Local Public Good ◽  
Steady State Distribution ◽  
State Distribution ◽  
Long Run ◽  
Split Graphs ◽  
Good Provision

In this paper, we propose a game in which each player decides with whom to establish a costly connection and how much local public good is provided when benefits are shared among neighbors. We show that, when agents are homogeneous, Nash equilibrium networks are nested split graphs. Additionally, we show that the game is a potential game, even when we introduce heterogeneity along several dimensions. Using this result, we introduce stochastic best reply dynamics and show that this admits a unique and stationary steady state distribution expressed in terms of the potential function of the game. Hence, even if the set of Nash equilibria is potentially very large, the long run predictions are sharp.

Share equilibrium in local public good economies

2011 ◽  
Vol 47 (3) ◽  
pp. 376-381 ◽  
Author(s):  
Anne van den Nouweland ◽  
Myrna Wooders
Keyword(s):  
Public Good ◽  
Local Public Good
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