Welcome to the Economics 230B Website. If you are taking
Econ 230B, please check this site regularly. I will use this site for posting
announcements about class procedures. I will also occasionally update the
syllabus and the class reading list.
| Reading List, Fall 2000 | |
| Introduction to Public Goods Theory | |
| Paul Samuelson, The
Pure Theory of Public Expenditures, Review of Economics and Statistics,
36(4): 350-356, 1954
Paul Samuelson, Diagrammatic Exposition of a Theory of Public Expenditure, Review of Economics and Statistics, 37(4):350-356, 1955 Paul Samuelson, Aspects of Public Expenditure Theories, Review of Economics and Statistics, 40(4):332-338, 1958 Erik Lindahl, Just Taxation--A Positive Solution, in Classics in the Theory of Public Finance, edited by R. Musgrave and A. Peacock Theodore Bergstrom and Richard Cornes, Independence of Allocative Efficiency from Distribution in the Theory of Public Goods, Econometrica, 51(6):1753-1765, 1983 Lectures 1, 2, 3, and 4 from Bergstrom's Lecture Notes on Public Economics Remarks on Readings in this sectionThe Lindahl article is a classic, written as a chapter in a book (in German) by the Swedish economist, Lindahl in 1919. It is short, modern in spirit, and a good thing to read. If you want to read more old classic articles by European public finance economists of the early 20th century, you can find them in the book "Classics in the Theory of Public Finance" from which this article is taken. The Samuelson papers are modern classics and everybody who studies public finance should read them. The Bergstrom-Cornes paper is well-known to your instructor. |
|
| Externalities and the Coase Theorem | |
| Ronald Coase The
Problem of Social Cost Journal of Law and Economics 3: pages
1-44 1960
Urs Schweitzer, Externalities and the Coase Theorem: Hypothesis or Result? Journal of Institutional and Theoretical Economics, 144:245-266, 1988 Garrett Hardin, The tragedy of the Commons, Science, 144:245-266, 1968 Theodore Bergstrom, Regulation of Externalities, Journal of Public Economics, 5:131-138, 1976 Richard Schmalensee, et. al., An Interim Evaluation of Sulphur Dioxide Emissions Trading, Journal of Economic Perspectives, 12(3):53-68, 1998 Lectures 5 and 6 from Bergstrom's Lectures on Public Economics Remarks on Readings in this Section The Coase article is another classic that every student
of public finance should read. Schweitzer's article presents a fine
modern interpretation of Coase's ideas. Schweizer's piece is also
an excellent introduction to mechanism design theory.
|
|
| Congestion Externalities | |
| William Vickrey, Pricing
in Urban and Suburban Transport, American Economic Review, 52(2):,1963
William Vickrey, Congestion Theory and Transport Investment, American Economic Review, 59:251-260, 1969 Richard Arnott, Andrew de Palma, and Robin Lindsey, A Structural Model of Peak-Period Congestion: A Traffic Bottleneck with Elastic Demand, American Economic Review 83: pages161-179 1993 Richard Arnott and Ken Small, The Economics of Traffic Congestion, American Scientist 82: pages 446-455, 1994. Jam Today, Road Pricing Tomorrow The Economist, December 6, 1997 Hal Varian and Jeffrey Mackie-Mason Economics of the Internet, 1994 Public goods theory has a lot to say about new economic problems that have arisen in the "information age." Several related papers and links can be found on Hal Varian's web page. Remarks on Readings in this Section I believe that the economics of congestion is a very promising area for further research. Two areas in which there are very important practical applications are traffic congestion and congestion on computer networks. In my opinion neither of these areas has received the attention from economists that is merited by its importance and interest. Both seems to me areas in which economic theory and econometrics are likely to be powerful tools. Vickrey's papers are full of clever insights. The
papers by Arnott and his coauthors develop these ideas with skill and elegance.
|
|
| Introduction to Public Choice Theory and Voting | |
| H. Bowen, The
Interpretation of Voting in the Allocation of Resources, Quarterly
Journal of Economics, 58(1):27-48, 1943
Jonathan Levin and Barry Nalebuff, An Introduction to Vote-Counting Schemes, Journal of Economic Perspectives, 9(1): 3-26, 1995 Hugo Sonnenschein, The Economics of Incentives: An Introductory Account, Nancy Schwartz Memorial Lecture, J. L. Kellogg School of Management, Northwestern University, 1983 Theodore Bergstrom, When Does Majority Rule Supply Public Goods Efficiently? Scandinavian Journal of Economics, 216-226, 1979 Arthur Denzau and Robert MacKay, Benefit Shares and Majority Voting, American Economic Review, 66(1):69-76, 1976 John Ledyard, The Pure Theory of Large Two Candidate Elections, Public Choice Vol. 44, (1984) pp. 7-41. Timothy Feddersen and Wolfgang Pesendorfer, The Swing Voter's Curse, American Economic Review, 1996, vol 86, pp408-426 Tom Palfrey and Richard McKelvey An Experimental Study of Jury Decision Rule, Cal Tech working paper, 1997 Andrew Caplin and Barry Nalebuff, On 64%-Majority Rule, Econometrica, Vol. 56, No. 4. (Jul., 1988), pp. 787-814. Theodore Bergstrom and Robert Goodman, Private
Demands for Public Goods,
Arye L. Hillman and John Riley, Politically Contestable Rents and Transfers, UCLA working paper, September, 1987 A good place to look for more discussion and references
on voting theory (and tips on ice-fishing technique and sauna etiquette)
is
Don Saari's home page
|
|
| Private Provision of Public Goods | |
| Theodore Bergstrom, Laurence
Blume, and Hal Varian, Private
Provision of Public Goods, Journal of Public Economics, 29:25-49
1986
James Andreoni and Theodore Bergstrom, Do government subsidies increase the private supply of public goods? Public Choice, 1997 (pdf file) (postscript file) John Morgan Financing Public Goods by Means of Lotteries Working Paper, 1997 John Morgan Funding Public Goods with Lotteries: An Experiment Working Paper, 1998 Theodore Bergstrom, Puzzles: Love and Spaghetti, The Opportunity Cost of Virtue, The Journal of Economic Perspectives, Vol. 3, No. 2. (Spring, 1989), pp. 165-173. Eduardo Ley, On the Private Provision of Public Goods, A Diagrammatic Approach, Investigaciones Economicas, 20(1): 691-704, 1996 |
|
| Public Goods in the Experimental Laboratory | |
| John Ledyard, Public Goods:
A Survey of Experimental Research in Kagel and Roth ed.Handbook of Experimental
Economics Princeton University Press. 1993
James Andreoni and John Miller, Analyzing Choice with Revealed Preference: Is Altruism Rational?, University of Wisconsin working paper, June 1998 James Andreoni and Rachel Croson Partners versus Strangers: The Effect of Random Rematching in Public Goods Experiment, University of Wisconsin working paper, June 1998 Tom Palfrey and Jeffrey Prisbey, Anomalous Behavior in Public Goods Experiments, How Much and Why?, to appear, American Economic Review |
|
| Public Goods with Distortionary Taxation | |
| Anthony B. Atkinson and Nicholas Stern. Pigou, taxation, and public goods. Review of Economic Studies 41:119--128, 1974. | |
| Edward Foster and Hugo Sonnenschein. Price Distortion and Economic Welfare Econometrica 38:281--297, 1970. | |
| Trout Rader. The
Welfare Loss from Price Distortions Econometrica 44:6 1253--1257,
1976.
Theodore Bergstrom. Commentary on Rader and Foster-Sonnenschein in Economics with No Special Technology by Trout Rader, Input-Output Publishing Company pp 179-182 |
|
| Public Goods With Exclusion | |
| Minasian J,Television
pricing and the theory of public goods. Journal of Law and Economics
71:71-80,1964.
Paul Samuelson.Public goods and subscription tv: Correction of the record. Journal of Law and Economics 71:81--84, 1964 William Oakland, Public Goods, Perfect Competition, and Underproduction, Journal of Political Economy, 82(5), 927-939, 1974 Geoffrey Brennan and Cliff Walsh, A Monopoly Model of Public Goods Provision: The Uniform Pricing Case The American Economic Review, 71(1):196-206,1981 Dagobert L. Brito, William H. Oakland, On the Monopolistic Provision of Excludable Public Goods The American Economic Review, 70(4):691-704, 1980 Michael E. Burns and Cliff Walsh, Market Provision of Price-excludable Public Goods: A General Analysis The Journal of Political Economy, 89(1):166-191, 1981 Michele Boldrin and David Levine, Why
Napster is right, web publication
|
Theodore Groves and John Ledyard , Optimal Allocation of Public Goods: A Solution to the Free Rider Problem, Econometrica 45(4):783-809, May, 1977
Yan Chen and Charles Plott, The
Groves-Ledyard Mechanism: An Experimental Study of Institutional Design",Journal
of Public Economics 59:335-364, 1996
| Lecture Notes |
| Lecture notes will be updated and improved as the course progresses.
My plan is eventually to make them into a book.
Lecture notes optimized for web-viewing Lecture 1. An Introduction to Public Goods Adobe Acrobat file, Postscript file Lecture 2. Private Goods and Public Goods Adobe Acrobat file, Postscript file Lecture 3. Independence of Allocation and Distribution Adobe Acrobat file, Postscript file Lecture 4. Lindahl Equilibrium Adobe Acrobat file Postscript file Lecture 5. Externalities Adobe Acrobat file Postscript file Lecture 6. Law'n Economics Adobe Acrobat file Postscript file Lecture 7. Congestion Postscript
file
Answers to Problems Lecture 3 Lecture 4
|