Working Paper BETA #2010-14

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Title : Cooperative provision of indivisible public goods.

Author(s) : Pierre Dehez

Abstract : A community faces the obligation of providing an indivisible public good. Each member is capable of providing it at a certain cost and the solution is to rely on the player who can do it at the lowest cost. It is then natural that he or she be compensated by the other players. The question is to know how much they should each contribute. We model this compensation problem as a cost sharing game to which standard allocation rules are applied and related to the solution resulting from the auction procedures proposed by Kleindorfer and Sertel (1994).

Key-words : public goods, cost sharing, core, nucleolus, Shapley value.

JEL Classification : C71, H41, M41.