Nash-Cournot or Lindahl Behavior? An Empirical Test for the NATO Allies.
This paper derives systems of demand equations for distinguishing between Nash-Cournot and Lindahl behavior in a group that either shares a pure public good or an activity that provides a private and a pure public joint product. Systems of simultaneous equations are estimated based upon Nash-Cournot and Lindahl behavior for a sample of ten NATO allies for the 1956-87 period. Nonnested hypothesis tests support the Nash-Cournot specification for five of the ten sample allies. No evidence of Lindahl behavior is found. The Nash-Cournot joint-product specification outperforms the pure public model for all sample allies. Copyright 1990, the President and Fellows of Harvard College and the Massachusetts Institute of Technology.
Year of publication: |
1990
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Authors: | Sandler, Todd ; Murdoch, James C |
Published in: |
The Quarterly Journal of Economics. - MIT Press. - Vol. 105.1990, 4, p. 875-94
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Publisher: |
MIT Press |
Saved in:
Online Resource
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