Clive D. Fraser

The uniqueness of Nash equilibrium in the private provision of public goods: An alternative proof

Abstract This note provides an alternative, elementary proof of Bergstrom, Blume and Varians well-known result on the uniqueness of Nash equilibrium in the private provision of a public good when all goods are normal.

On the provision of excludable public goods

Abstract Self-selecting households consume an exclusable public good via enabling expenditures-e.g. on TVs and licence fees for broadcasting. We characterise voluntary consumers at an arbitrary all-or-nothing price, and the optimal price a revenue-constrained welfare-maximiser facing voluntary consumers chooses. These are compared with those from universal provision of the public good via a uniform tax. We show that, inter alia, demand for the good might increase with price; self-selection will produce under-provision. Numerical welfare comparisons show that either mandatory or voluntary participation can be superior, depending on societys income dispersion and inequality aversion.

When Is Efficiency Separable from Distribution in the Provision of Club Goods

Abstract Using the homogeneous of degree zero inverse congestion (“quality”) function employed most frequently in the literature, we characterise completely the families of utility functions which are then necessary and sufficient for break-even utilitarian welfare maximising provision of club goods with self-selection to be separable from distribution. Two types of separation—involving, alternatively (a) the price and quality; (b) the price, quality, facility size and total utilisation—are considered. When separation is possible, utility functions and optimal decisions take simple, intuitive forms. Our results extend the scope of separation results previously obtained only for pure public goods. Journal of Economic Literature Classification Numbers: D62, H23, H40.

Corrigendum to 'When is Efficiency Separable from Distribution in the Provision of Club Goods?' [Journal of Economic Theory 90 (2000) 204-221]

Abstract This note corrects a slip in Frasers (J. Econ. Theory 90 (2000) 204–221) treatment of the necessary condition for partial separation of efficiency from distribution in providing a club good. His corrected Theorem 1 shows that many families of utility function can generate partial (and total) separation, thereby considerably extending the scope of his analysis.

Optimal compensation for potential fatality

Abstract Cordes and Weisbrod have recently demonstrated that the requirement that the government actually compensate individuals adversely affected by public projects is likely to have serious resource allocation implications. We examine a rudimentary model of government discretionary behaviour subject to a compensation requirement in the presence of physical risks. Risk assessments are endogenous and asymmetrically held — features enabling analysis of the trade- offs between compensation and protection or information available to the government, and of the structure of compensation which motivates it to do what is objectively best for the individual. We show that, paradoxically, greater government discretion seems more likely to ensure the latter.

What is ‘fair compensation’ for death or injury?☆

Abstract This note demonstrates that David Friedmans recent assertion that, because full ex post compensation means that the potential injuror is overcompensating, ‘it follows that he will be overdeterred from imposing risk …’ cannot be supported, a priori , except in special cases. It is argued that this finding actually strengthens the case for compensation which is ‘fair’ as defined by Friedman.

Exclusion and moral hazard: A further analysis

Abstract This paper examines the impact of increasing exclusion costs on the price of a shared good and establishes a simple elasticity condition which determines whether or not the price increases with the exclusion costs. We correct an error in the reasoning in Silva and Kahns (Journal of Public Economics, 1993, 52, 217–235) paper on exclusion and moral hazard, and construct a class of examples to show that, contrary to their claim, costly exclusion of non-subscribers from the consumption of a non-rivalrous good can result in a lower price as compared with the first best with costless exclusion.