Non-linear Prices and the Optimal Allocation of Public Goods

Abstract

"In the last decade there has been considerable interest in decentralized procedures for both choosing the scale of and financing public goods projects. The literature has focused on two different types of decentralized allocation schemes: demand-revealing mechanisms and dynamic tatonnement planning procedures. In addition, despite the free rider problem, voluntary subscription has received some renewed attention. Kalai (1980) has proposed a voluntary contractual procedure which induces cooperative behavior."