Correction to “Farmers' Pro‐Social Motivations and Willingness‐To‐Accept in Markets with Public Goods”

Exposing an overlooked ambiguity in how philosophers use the term ‘public good,’ this paper proposes to distinguish between inherently and contingently public goods, where inherently public goods are non-rivalrous and non-excludable in principle (e.g., national security) and contingently public goods are non-rivalrous and deliberately provided in a non-exclusionary way (e.g., parks). This distinction is conducive to philosophical debate in two ways. At the level of ideal theory, contingently public goods reveal the inadequacy of the various benefit principles that have been proposed to ensure justice in the provision of public goods (Claassen 2013; Miller and Taylor 2018; Murphy and Nagel 2001). Because these goods could be provided as club goods, benefit principles mandate unacceptable transfer payments to the privately wealthy and to people who disvalue their inclusive mode of provision. At the level of non-ideal theory, contingently public goods constitute a natural yet underappreciated focal point for effectively rectifying injustices. While all public goods promise to render access to private resources less relevant, contingently public goods hold special potential: their provision may be costless and involve no market interference, it can more powerfully express a commitment to status equality and it can be especially effective at addressing inequalities in opportunity.

In economics, public or collective goods are contrasted with private goods. The enjoyment of a private good can be restricted to those who pay for it, and the consumption of a private good by one person makes it unavailable to anyone else. Markets “work” for private goods, where individuals make clear decisions about cost/benefit tradeoffs and prices are the consequences of the forces of supply and demand. By contrast, public (collective) goods are nonexcludable—shared by everybody, whether they helped pay for the good or not—and nonrival—in that one person's “enjoyment” of the good does not affect another's. People who share in a public good without paying for it are often called “free riders.” Because people can share in a public good if it is paid for by others, the usual assumptions of the market fail, and economists and social scientists generally argue that public goods need to be provided through taxation or other collective means. Public goods are an instance of the more general matter of externalities, in which one person's actions or choices affect the costs or benefits to other people who did not make the choice. Within economics, there has been a great deal of elaboration of these ideas. Some goods are nonrival but excludable (e.g., satellite television), others are nonexcludable but rival (e.g., environmental resources); both excludability and rival‐ness are continua rather than dichotomies. Public or collective goods vary greatly in important ways that affect the social dynamics of their provision, including their lumpiness and the linearity or nonlinearity of their production functions. Moreover, the same “good” (like clean air or a bridge) can be provided in different ways that have different production functions relating contributions to benefits. Introductory overviews of these issues may be found in the cited references.

In economics, public or collective goods are contrasted with private goods. The enjoyment of a private good can be restricted to those who pay for it, and the consumption of a private good by one person makes it unavailable to anyone else. Markets “work” for private goods, where individuals make clear decisions about cost/benefit tradeoffs and prices are the consequences of the forces of supply and demand. By contrast, public (collective) goods are nonexcludable – shared by everybody, whether they helped pay for the good or not – and nonrival – in that one person's “enjoyment” of the good does not affect another's. People who share in a public good without paying for it are often called “free riders.” Because people can share in a public good if it is paid for by others, the usual assumptions of the market fail, and economists and social scientists generally argue that public goods need to be provided through taxation or other collective means. Public goods are an instance of the more general matter of externalities, in which one person's actions or choices affect the costs or benefits to other people who did not make the choice. Within economics, there has been a great deal of elaboration of these ideas. Some goods are nonrival but excludable (e.g. satellite television), others are nonexcludable but rival (e.g. environmental resources); both excludability and rival‐ness are continua rather than dichotomies. Public or collective goods vary greatly in important ways that affect the social dynamics of their provision, including their lumpiness and the linearity or nonlinearity of their production functions. Moreover, the same “good” (like clean air or a bridge) can be provided in different ways that have different production functions relating contributions to benefits. Introductory overviews of these issues may be found in the cited references.

Flood Risk Management as a public or a private good, and the implications for stakeholder engagement

THE CORE, an n person game solution concept, has proved to be very useful in analyzing economic allocations in a private goods economy (see, e.g., [1]). Viewed as an n person game, such an economy requires the specification of production and distribution activities open to an arbitrary coalition of economic agents. We say a coalition can improve upon a proposed vector of utility levels which stems from an allocation which is collectively feasible for all of the economic agents if it can achieve levels of utility for all of its members which are higher than the corresponding levels in the proposed vector. The core consists of all utility vectors feasible for the whole economy which cannot be improved upon by any coalition. The crucial issue is how to formulate what a coalition can achieve for itself. In a private goods economy there is a natural formulation-we simply allow a coalition to produce its own outputs from its own inputs, and look at the utility levels resulting from a distribution of these outputs among the group. In public goods economies, or more generally in economies involving externalities, the formulation of what a coalition can achieve for itself is not so transparent. The problem is that agents not in a given coalition can modify the distribution of utilities within the coalition. Unlike the situation in a private goods economy, we cannot specify a set of utility levels attainable by a coalition independently of the activities of the complementary coalition, i.e., agents not in the coalition. Consider anl economy with pure public goods. By the definition of pure public goods, the mlembers of a coalitiotn would be able to consume the public goods produced by the complementary coalition. Thus it is natural to say that a coalition can achieve for itself utility levels associated with the distribution of both public anid private goods which it produces using its own resources, together with the consumption of the public goods produced by the complementary coalition. In order to determine the quantity of public goods produced by the complementary coalition we must define a set of permissible activities for it. Suppose we allow it to produce any amount of public and private goods consistent with its endowment of resources. Then, in order to deter the given coalition from forming and objecting to the status quo, it would threaten to produce no public goods, since this would nullify any free consumption of its public goods by the

The position of architecture between market goods and public goods is addressed in this study. A transition of architectural objects of built environment from market goods towards public or nonmarket goods is presented in literature review. The real estate market value is highly influenced by concepts of externalities and public goods, therefore being highly spatially dependent and making the process of the real estate valuation more complex. The internalization of these externalities and public goods is impossible because of the nature of public space in the city. The concept of value and different types of value, like exchange, use, image, social, environmental, cultural value, are also presented in literature review. These different types of value are transferred to value in exchange when estimating market value. The aim of research is to calculate the amount of the real estate market value that is influenced by externalities, public or nonmarket goods. The process of value transfers between market and public is also discussed in this study. In the research part prices of similar apartments measure the coefficient of variance. Newly constructed apartment buildings with partial finishing interior within city boundaries are selected expecting their price to vary only because of different amount of externalities and public goods available inside district/region of selected building or provided by the actual building itself. The results show that up to 29% of the real estate market value is influenced by public or nonmarket goods. Implications of further research suggest controlling for market segmentation and architectural quality variables

Public goods and monopolistic competition have traditionally been separate fields of study in microeconomics, each field having its own array of models. In this book, Stephen Shmanske builds a theoretical bridge between these two areas, suggesting that public goods and monopolistic competition are different dimensional simplifications of the same general model. The author argues first that the generic model for public goods has two dimensions of consumption but that public goods models have usually ignored or simplified the utilization dimension. Furthermore, private goods models in the monopolistic competition vein also have two implicit dimensions of consumption, but again, one of the dimensions is treated in a very constrained fashion. As it turns out, between public goods and monopolistic competition, each model emphasizes the dimension that is ignored or simplified in the other. Thus, the general, mixed goods model draws from both traditions, using the results of one model to generalize and extend the other. An immediate implication of the analysis is that the traditional models of public goods and monopolistic competition have focused on special cases and thus have provided misleading conclusions. Specifically, monopolistic competition and other models of differentiated oligopoly have reached conclusions in settings that emphasize uniform pricing despite the facts that (1) discriminatory pricing has been studied in competitive situations in public goods models, (2) discriminatory pricing is the more usual pricing method, and (3) the results obtained using uniform pricing do not generalize to more sophisticated pricing regimes. Meanwhile, public goods models have focused on special cases like national defense, where the results obtained do not generally apply in other public or mixed goods settings. Shmanske's conclusions have great relevance to policy formation on public goods provision. Public goods and mixed goods are not curious anomalies; they are all around us, and in most cases competitive private sector agents can and have been providing public goods with no market failure. Professionals and scholars in the areas of public finance and industrial organization will appreciate Shmanske's careful critique of existing models and his rigorous conceptualizing and modeling of public goods in private markets characterized by monopolistic competition.

1. Introduction Traditionally, an analytically convenient and widely used assumption in the international trade and development economics literature has been that of lump-sum distribution of direct (e.g., income) or indirect (e.g., consumption, tariff) tax revenue when various policy implications of such instruments (e.g., terms of trade or welfare effects) were to be examined. This analytical shortcut, however, hardly ever constitutes a real-world practice either in rich developed or in poorer developing economies. On the other hand, another extensive branch of economics, the public finance literature, has adopted a more realistic approach regarding the economic activity of a government. A government is viewed, among other things, as a provider of public (collective) consumption goods and/or of public inputs that enhance the productive capacity of the private sector. Being so, it can use revenues from nondistortionary (e.g., lump-sum) taxes or distortionary (e.g., consumption) taxes to finance the provision of such goods and services. Within this public finance context, a long-standing proposition states that when nondistortionary taxes are used to finance the provision of a public good, the first-best efficiency rule requires that the sum of the marginal rates of substitution (i.e., the social marginal benefit) equal the marginal rate of transformation (i.e., the social, marginal cost) (e.g., see Samuelson 1954). When distortionary taxes are used to finance the provision of the public good, Pigou (1947) argued that the social marginal cost exceeds the private marginal cost because of the induced indirect cost from raising tax revenue through distortionary taxation. Stiglitz and Dasgupta (1971), Atkinson and Stem (1974), and Wildasin (1984), among others, demonstrate that in certain cases (e.g., when the taxed and the public goods are complements in consumption), Pigou's argument fails to hold and the social cost may fall short of the private marginal cost.' Because of its more realistic appeal, this public finance approach to the use of tax revenue has been subsequently adopted by the relevant international trade and development economics literature. Recently, the efficiency rule for public good provision has been examined in the context of a small open economy by, among others, Feehan (1988) when tariff revenue finances the provision of the public good in an economy producing two traded goods and a nontraded public consumption good. Michael and Hatzipanayotou (1995) examine the same issue and derive the formulae for the optimal tax rates on traded or nontraded goods in an economy producing many traded and nontraded goods and where consumption tax revenue finances the provision of the public good. Michael and Hatzipanayotou (1997) demonstrate the failure of the first-best efficiency rule when lump-sum taxes are used to finance the provision of a public good in a small open economy in the presence of trade restrictions (i.e., a tariff or a VER). Two features in the above reviewed studies of the international trade/development economics and public finance literature motivate the present paper. First, all these studies derive the efficiency rule for public good provision in the context of a small open or closed economy with full employment. Unemployment, however, to a lesser or to a larger extent remains a structural feature of many developed or developing economies. From an analytical standpoint, the existence of such a distortion may alter both the optimal tax formulae and the efficiency rule for public good provision. Second, the above reviewed literature considers the case where a government uses a single policy instrument (e.g., lump-sum taxes, income taxes, tariffs) to finance the provision of the public good. More than often, however, governments may have at their disposal several tax instruments that they can simultaneously use in order to raise revenue for financing the provision of public consumption goods. …

Privatization and Commercialization of the Internet Infrastructure: Rethinking Market Intervention into Government and Government Intervention into the Market

Traditional analysis takes the public or private nature of goods as given. However, technological advances, particularly related to digital goods such as non-fungible tokens, increasingly make rivalry a choice variable of the designer. This paper addresses the question of when a profit-maximizing seller prefers to provide an asset as a private good or as a public good. While the public good is subject to a free-rider problem, a profit-maximizing seller or designer faces a nontrivial quantity-exclusivity tradeoff, and so profits from collecting small payments from multiple agents can exceed the large payment from a single agent. We provide conditions under which the profit from the public good exceeds that from a private good. If the cost of production is sufficiently, but not excessively, large, then production is profitable only for the public good. Moreover, if the lower bound of the support of the buyers’ value distribution is positive, then the profit from the public good is unbounded in the number of buyers, whereas the profit from selling the private good is never more than the upper bound of the support minus the cost. As the variance of the agents’ distribution becomes smaller, public goods eventually outperform private goods, reflecting intuition based on complete information models, in which public goods always outperform private goods in terms of revenue.

In recent years several parts of the pure theory of international trade have been reworked to incorporate public intermediate goods.(1) Meade[1952] recognized two types of public intermediate goods. One type consists of pure public goods, which Meade called ‘creation of atmosphere’, and the other type consists of semi public goods, which he called ‘unpaid factors’. Pure public goods remain fully available to every firm irrespective of the number of firms. Free information about technology is a typical example of this type of public good. On the other hand, semi-public goods suffer from congestion within an industry and thus a reduction of availability to a firm when the number of firms in this industry expands. Examples of this type of public goods are transportation services of roads and telecommunication networks. The mathematical formulation of the production function for a private good makes clear the distinction between them. The production function is linear homogeneous in primary inputs and semi-public inputs but not in pure public inputs.

The job of local elected officials (LEOs) in governing municipalities is a complicated and demanding one. How LEOs handle their jobs affects taxpayers and their communities' present and future generations. The task of LEO development involves learning and is a public issue. LEOs govern in the context of representative democracy. Once installed in office, LEOs are trustees for the voters, acting as lawmakers, policy makers, and fiduciary agents.(1) They make laws, policies, and budget allocations as the authoritative decisions of city councils. Their decisions can involve a single choice about an immediate and narrowly focused problem. In response to broader, longer-term issues, they can make a series of decisions that they formalize in public policies (Salisbury, 1968). Because of citizen demands, court orders, and the devolution of governmental authority, cities have expanded their scope beyond the traditional mix of police, fire, and public works. Therefore, the substance of their policy decisions has a broad range.(2) Citizens expect LEOs' collective decisions to produce the following outcomes: an array of municipal services; the protection of people, property, and the environment; prohibitions of certain types of behaviors; a local economy that attracts and retains residents and businesses; and plans for the future. Effective LEOs must cooperate with many people within their cities and coordinate their decisions with other elected officials. Some of their decisions affect multiple jurisdictions, as with infrastructure development; other decisions, such as airport expansion, have global impact. Often the choices of LEOs conflict with the preferences of their constituents or the campaign promises that helped them win office. Understanding the difference between making citizens happy and doing the right thing is difficult for LEOs. Rather than wrestle with hard dilemmas, most LEOs rely on instinct and guesswork for making trade-offs (Hammond, Keeney, and Raiffa, 1998). LEOs'jobs are laden with conflict because municipal governance occurs in the arena. Cities are subdivisions of state governments. They are territorially based organizations; LEOs derive their authority from the democratic system.(3) To govern effectively, LEOs must create processes, relationships, and entities that produce sound municipal organizations (Frederickson, 1989). A sound municipality provides public goods for its citizens. Public goods, as distinguished from nonpublic goods, are those that citizens collectively consume, and the benefits of their consumption are indivisible (Downs, 1967). Some examples of public goods are clean air and clean water. As actors in the system, LEOs are obligated to formulate policies and allocate resources in support of public goods. Because municipalities are not market-driven entities, they cannot rely solely on the citizenry's voluntary contributions to support them (Olson, 1973). LEOs' authority to tax residents determines who pays for public goods consumed in their cities. Their policies concerning the provision of public goods usually require a redistribution of incomes, and those from whom they take money may not yield without sanctions (Downs, 1967). To maintain municipal organizations, LEOs must assert leadership as political (Olson, 1973; Salisbury, 1969).(4) Political entrepreneurs create incentives that will attract citizens to bear willingly the costs of providing an optimal supply of public goods.(5) It is no surprise to find that most municipalities deliver a mix of public and nonpublic goods to raise revenues. LEOs' determination of the appropriate mix of public and nonpublic goods is controversial (Sharp, Register, and Leftwich, 1990). Because this controversy is a judgment, it arouses conflict and disagreements. The fragmentation of power and authority in the democratic system intensifies these disagreements and compels LEOs to manage conflict (Schattschneider, 1960). …

In this paper we challenge the traditional distinction between public goods and private goods. Economists use a definition of public goods that rests on the inherent properties of the good itself. Referring to criteria such as non-rivalness and non-excludability, they assert that the distinction is fixed in nature and cannot be altered by human observes. We argue that the boundary between public and private goods is socially constructed. That is, what is a public good and what is a private good is not determined by fixed criteria; rather it is decided by society. Thus, what is a public good in one community might be a private good in another. It is this moveable boundary between public and private that makes it essential to analyźe public policy with values up front, not hidden behind the seemingly technical concept of public goods.

10 - The scale effect of public goods on production-possibility sets

The segregative properties of endogenous jurisdiction formation with a land market