EFFICIENCY WITH NON-CONVEXITIES - EXTENDING THE SCANDINAVIAN CONSENSUS APPROACHES

There are two distinct ''Scandinavian consensus'' approaches to public good supply, both based on agents' willingness to pay. A.Wicksell-Fol ey public competitive equilibrium arises from a negative consensus in which no change of public environment, together with associated taxes and subsidies which finance it, will be unanimously approved. Alternat ively, in a Lindahl or valuation equilibrium, charges for the public e nvironment induce a positive consensus. To allow general non-convexiti es to be regarded as aspects of the public environment, we extend rece nt generalizations of these equilibrium notions and prove counterparts to both the usual fundamental efficiency theorems of welfare economic s.