THE OPTIMAL SUPPLY OF CONGESTED PUBLIC GOODS
Published: 29 Aug 2014
Abstract: Impure public goods resulting from the congestion effect are discussed in the literature solely for the case of homogenous populations where consumers have identical demands. We extend this to include heterogeneous populations, where demands are rectangularly distributed. We compare the optimal values of the control variables (quantity of the public good and the number of users) for both homogeneous and heterogeneous populations, as well as the social optimum values for both cases.
Keywords: congested public good, lindhal, rectangulary distributed demand, homogeneous and heterogeneous customers
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