Existence, Uniqueness and Some Comparative Statics for Ratio and Lindahl Equilibria

Abstract

We present a rigorous, yet elementary, demonstration of the existence of a unique Lindahl equilibrium under the assumptions that characterize the standard n-player public good model. Indeed, our approach, which exploits the aggregative structure of the public good model, lends itself to a transparent geometric representation. Moreover, it can handle the more general concept of the cost share or ratio equilibrium. Finally, we indicate how it may be exploited to facilitate comparative static analysis of Lindahl and cost share equilibria.