Replica economies with congested public goods (Q2640425)

The characteristic feature of private goods is that a distinct unit of supply cannot be consumed by more than one individual. There is full rivalry in consumption. Pure public goods, on the other hand, can be used simultaneously by infinitely many individuals. The paper's focus is on so-called ``congested public goods'' which are characterized by the fact that each unit of supply can be consumed simultaneously by a fixed number of individuals. The point is that this number remains constant when the economy is replicated. This introduces a certain degree of consumption rivalry when the total number of potential users becomes sufficiently large. ``Unlike in the theory of pure public goods (it is proved) that the core of an economy with congested public goods shrinks to the set of Lindahl allocations as the economy is replicated. The proof is achieved by showing that all allocations in the core of a sufficiently large replica economy have the equal-treatment property. (The author discusses) briefly possible continuum versions of an economy with congested public goods as well.'' (Cited from the abstract.)