We develop a model with a finite number of households and congestable local public goods where the level of provision, the number of facilities and their locations are all endogenously determined. We prove that an equal-treatment identical-provision second-best optimum exists, where all...

Despite wide recognition of their significant role in explaining sustained grwoth and economic development, uncompensated knowledge spillovers have not yet been fully modeled with a microeconomic foundation. The main purpose of this paper is to illustrate the creation of knowledge as well as its...