On the Private Provision of Public Goods: A Diagrammatic Exposition

Abstract

This paper surveys a selection of the literature on the private provision of public goods using the Kolm triangle. (The Kolm triangle is the analogue of an Edgeworth box in an economy with a public good.) We provide simple geometrical proofs of various established results using this graphical device. Our reference framework is the model of private contributions to public goods developed by Bergstrom, Blume and Varian (1986). With the Kolm triangle, we can easily study the existence and uniqueness of Nash equilibria, the effects of redistribution of the initial wealth, the level of provision in Stackelberg equilibria, the effects of subsidizing private contributions, and the implementation of Lindahl equilibria.Public Goods, Nash Equilibrium, Stackelberg Equilibrium, Lindahl Equilibrium, Kolm triangle, Redistribution, Subsidies, Regressive Redistribution of Income