The open source paradigm is often defined as a collaborative effort, implying that firms and consumers come together in a non-competitive climate. We show here that open source development can arise from a competitive climate. Under competition, we find that open source is the surplus maximizing...

We study the differences between public production and public finance of public goods in a dynamic general equilibrium model. Under public production, public goods are produced by the government. Under public finance, the same amount of public goods is produced by cost-minimizing private...

One version of the Coase Theorem is, If property rights are fully allocated, competition leads to efficient allocations. This version implies that the public goods problem can be solved by allocating property rights fully. We show that this mechanism is not likely to work well in economies with...

Статья представляет собой фрагмент из будущей книги автора <Рождение теории. Разговоры с известными экономистами> и посвящена полемике с Р. Масгрейвом. Основной предмет дискуссии - теория общественных благ и...</Рождение>

This paper studies the conditions for a welfare-maximizing allocation of resources to the production of global public goods, such as biodiversity, the global climate, the cultural heritage, knowledge, and world peace. A global social welfare function is maximized subject to production...

We propose a new approach to the normative analysis of public-good provision in a large economy. Our analysis is based on a mechanism design approach that involves a requirement of coalition-proofness, as well as a requirement of robustness, so that the mechanism must not depend on specific...

In this paper, we consider the problem that a benevolent designer wants to provide a non-excludable public good with a fixed cost to agents with privately known valuations. Adopting utilitarian's point of view, the designer maximizes the ex-ante total utility of all agents. The impossibility...

The optimal income tax model under the threat of migration is extended to include both indirect taxes and public goods. This has enabled us to check that: 1) optimal income tax rates are higher than in the absence of indirect taxes and, at the top of the skills distribution, may be positive; 2)...

This Article is written as two discrete, independently accessible topical sections. The first topical section, presented in Part I of this Article, is a case study of Bank of America's acquisition of Merrill Lynch and the impact of a flawed merger execution on the board's subsequent decisions....

We argue that when externalities such as pollution are nonexcludable, agents must be compelled to participate in a “mechanism” to ensure a Pareto-efficient outcome. We survey some of the main findings of the mechanism-design (implementation-theory) literature – such as the Nash...