Theory of Public Goods | Theories | Economics

The first clear formulation of a theory of public expenditure which can give a positive interpre­tation was presented by poter krut Wicksell and Esik Lindahl. In this formulation, individuals bargain over the level of public goods supply, simultaneously with the distribution of the cost between them. The bargaining equilibrium is Pareto optimal. In addition, each individual pays a price in [...]