TY  - JOUR
AU  - Fang,Hanming
AU  - Norman,Peter
TI  - Optimal Provision of Multiple Excludable Public Goods
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 13797
PY  - 2008
Y2  - February 2008
UR  - http://www.nber.org/papers/w13797
L1  - http://www.nber.org/papers/w13797.pdf
N1  - Author contact info:
Hanming Fang
Department of Economics
University of Pennsylvania
3718 Locust Walk
Philadelphia, PA 19104
Tel: 215-898-7767
Fax: 215-573-2057
E-Mail: hanming.fang@econ.upenn.edu

Peter Norman
Department of Economics
University of North Carolina at Chapel Hill
107 Gardner Hall
Chapel Hill, NC 27599-3305
E-Mail: normanp@email.unc.edu
AB  - This paper studies the optimal provision mechanism for multiple excludable public goods when agents' valuations are private information. For a parametric class of problems with binary valuations, we demonstrate that the optimal mechanism involves bundling if a regularity condition, akin to a hazard rate condition, on the distribution of valuations is satisfied. Bundling alleviates the free riding problem in large economies in two ways: first, it may increase the asymptotic provision probability of socially efficient public goods from zero to one; second, it decreases the extent of use exclusions. If the regularity condition is violated, then the optimal solution replicates the separate provision outcome.
ER  -