Business Intelligence

Mixed Markets With Public Goods

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Executive Summary

The authors use a mixed market model for analyzing economies with public projects in which the condition of perfect competition is violated. They discuss core-equivalence results in the general framework of non-Euclidean representation of the collective goods. They show that if large traders are similar to each other, then they lose their market power and hence the equivalence theorem can be restored. This is possible assuming a cost distribution function to fix the fraction that each large or small agent is expected to cover of the total cost of providing the project.

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