Cournot-Nash and Lindahl equilibria in pure public "bad" economies

Benyamin Shitovitz, Menahem Spiegel

Research output: Contribution to journalArticlepeer-review


Using a general equilibrium framework, this paper analyzes the equilibrium provision of a pure public bad commodity (for example pollution). Considering a finite economy with one desired private good and one pure public "bad" we explicitly introduce the concept of Lindahl equilibrium and the Lindahl prices into a pure public bad economy. Then, the Lindahl provision is analyzed and compared with the Cournot-Nash provision. The main results for economies with heterogeneous agents state that the asymptotic Lindahl allocation of the pure public bad is the null allocation. In contrast, the asymptotic Cournot-Nash provision of the public bad might approach infinity. Other results were obtained in concert with the broad analysis of the large finite economies with pure public bad commodities.

Original languageEnglish
Pages (from-to)17-31
Number of pages15
JournalEconomic Theory
Issue number1
StatePublished - Aug 2003


  • Cournot-Nash
  • General equilibrium
  • Lindahl equilibrium
  • Provision of public bad
  • Public bad
  • Public commodities

ASJC Scopus subject areas

  • Economics and Econometrics


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