Econometrica: Jul 1974, Volume 42, Issue 4
The Topology of Pareto-Optimal Regions with Public Goods
Milton C. Weinstein, Richard J. ZeckhauserThis analysis generalizes the concept of a private-goods contract curve to an economy with public goods. It provides a derivation of the properties of the set of Pareto-optimal points in n-space. The paper concentrates on situations where the taxation system for financing the public goods is externally imposed; the efficiency goal is thus "mechanism-constrained Pareto optimality." The results of the main analysis are applied to assess performance of several group decision procedures.
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