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Existence and Efficiency of a Price-Taking Equilibrium in an Economy with Public Goods, Externalities, and Property Rights: A Coasian Approach

dc.contributor.authorSmith, Stefani C.
dc.contributor.authorConley, John P.
dc.date.accessioned2004-04-01T19:57:13Z
dc.date.available2004-04-01T19:57:13Z
dc.date.issued2004-01
dc.identifier.citationConley, John P. and Stefani C. Smith. "Existence and Efficiency of a Price-Taking Equilibrium in an Economy with Public Goods, Externalities, and Property Rights: A Coasian Approach." Working Paper No. 04-W03. Dept. of Economics, Vanderbilt University. Nashville, TN, Jan. 2004.en
dc.identifier.urihttp://hdl.handle.net/1803/8
dc.description.abstractWe consider a general equilibrium economy with public goods and externalities. Following Boyd and Conley (1997), we treat externality markets directly instead of indirectly through Arrovian commodities. Because such direct externality markets are not subject to the nonconvexities that Starrett (1972) shows are fundamental to Arrow's externality markets, this new approach admits the use of largely standard methods to prove welfare and existence theorems in an economy with externalities. We extend the Boyd and Conley model to allow firms to benefit from public goods and be damaged by externalities, and to allow consumers to produce externalities. We state a first welfare theorem and prove the existence of a competitive equilibrium. Taken together, this can be viewed as a type of general equilibrium Coase Theorem. Considered as a special case, these theorems also represent a significant generalization of existing results for pure public goods economies.en
dc.format.extent244708 bytes
dc.format.mimetypeapplication/pdf
dc.language.isoen_US
dc.publisherVanderbilt University. Dept. of Economicsen
dc.relation.ispartofseriesWorking Paper
dc.subjectpollution permitsen
dc.subjectExternalitiesen
dc.subjectArrow commoditiesen
dc.subjectCoase Theoremen
dc.subjectH23en
dc.subjectH41en
dc.subjectLindahl Equilibriumen
dc.subjectproperty rightsen
dc.titleExistence and Efficiency of a Price-Taking Equilibrium in an Economy with Public Goods, Externalities, and Property Rights: A Coasian Approachen
dc.typeWorking Paperen


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