EQUILIBRIUM IN A FINITE LOCAL PUBLIC-GOODS ECONOMY

This paper examines the existence of a noncooperative equilibrium in a finite local public goods economy where consumers have quasi-linear p references. Jurisdictions consist of consumers who chose the same publ ic project and finance the cost of production of public goods through either a proportional income tax or a poll tax. We show that under a p roportional income tax scheme a Nash equilibria may fail to exist. Und er a poll tax scheme an equilibrium always exists but, in general. Nas h equilibria violate a very weak efficiency condition. We conclude by commenting on the stabilizing effect of zoning policies. (C) 1998 Acad emic Press.