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1、PublicSectorEconomics—MScEcon20111.PublicgoodsPaulSchweinzerNovember1,2011.1/31PublicSectorEconomics:Lecture1PublicgoodsPlanner’sproblemIndividualproblemHomogenouscaseHeterogenouscasePublicgoods:Reading◮AtkinsonA.andJ.Stiglitz(1980)Lecturesonpubliceconomics,McGraw-Hill,ch
2、apter16,482–97.◮Samuelson,P.(1954)“ThePureTheoryofPublicExpenditure,”ReviewofEconomicsandStatistics,36(4),387–89.◮Stiglitz,J.andP.Dasgupta(1971)“DifferentialTaxation,PublicGoods,andEconomicEfficiency,”ReviewofEconomicStudies,38(2),151–74.◮Atkinson,A.andN.Stern(1974)“Pigou,ta
3、xationandpublicgoods,”ReviewofEconomicsStudies,41,119–28.2/31PublicSectorEconomics:Lecture1PublicgoodsPlanner’sproblemIndividualproblemHomogenouscaseHeterogenouscasePublicgoodsA‘pure’publicgoodisboth◮non-rivalrous:consumptionofthegoodbyoneindividualdoesnotreduceavailabili
4、tyofthegoodforconsumptionbyothers,◮non-excludable:noonecanbeeffectivelyexcludedfromconsumingthegood.Bothnon-rivalnessandnon-excludabilitymaycauseproblemsfortheproductionofsuchgoods.Specifically,theymayleadtoinstancesofmarketfailure,whereuncoordinatedmarketsdrivenbypartieswo
5、rkingintheirownselfinterestareunabletoprovidethesegoodsinsociallyefficientquantities.Thisistheclassicpublicgoodsproblem.Ineconomictheory,publicgoodsproblemsrelatetothebroaderissueofexternalities.3/31PublicSectorEconomics:Lecture1PublicgoodsPlanner’sproblemIndividualproblemH
6、omogenouscaseHeterogenouscaseTaxonomyofeconomicgoods(bads?)Excludablenon-ExcludableRivalrousPrivategoodsCommongoodsnon-RivalrousClubgoodsPublicgoodsExamplesfor◮Privategoods:apple,pizza,cocaine.◮Commongoods:fish,game,water(‘commonpoolresources’).◮Clubgoods:satellitetelevisi
7、on,fitnessgyms,lectures.◮Publicgoods:air,nationaldefense,publictelevision,health.4/31PublicSectorEconomics:Lecture1PublicgoodsPlanner’sproblemIndividualproblemHomogenouscaseHeterogenouscaseFree-ridingandPublicgoodsPublicgoodsareanexampleofmarketfailure:individualoptimisati
8、ondoesnotproduceefficientoutcomesbecauseanindividualreapsonlyafractionofthesocialutilitybutcarries
