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A Core Equilibrium Convergence in a Public Goods Economy


Type

Working Paper

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Authors

Allouch, N. 

Abstract

This paper shows a core-equilibrium convergence in a public goods economy where consumers' preferences display warm glow effects. We demonstrate that if each consumer becomes satiated to other consumers' provision, then as the economy grows large the core shrinks to the set of Edgeworth allocations. Moreover, we show that an Edgeworth allocation can be decentralized as a warm glow equilibrium.


decentralization

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Keywords

competitive equilibrium, warm glow, public goods, Edgeworth, core

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Publisher

Faculty of Economics

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