Econometrica: Jan 1970, Volume 38, Issue 1

Lindahl's Solution and the Core of an Economy with Public Goods

https://doi.org/0012-9682(197001)38:1<66:LSATCO>2.0.CO;2-E
p. 66-72

Duncan K. Foley

In an economy with an arbitrary number of consumers and an arbitrary number of commodities, some public and some private, I propose a generalization of Lindahl's equilibrium solution, and prove an existence theorem for it. A particular generalization of the "core" of an exchange equilibrium to an economy with public goods is proposed, and it is shown that a Lindahl equilibrium allocation is also a core allocation.

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