Download This PaperLindahl's Confusing Marginal Utility Theory
5 Pages Posted: 30 Oct 2015
Date Written: October 28, 2015
Abstract
This paper proves that Lindahl has confused cost with benefit. He viewed public good as benefit and people will fight to take a larger share of the good. This paper proves that his model could not accommodate the public good, but the cost of the good. When a person has to take up the burden of cost sharing, his utility is negatively affected, so his marginal utility is a positive function of the spending. This paper proves that they will fight to shun the burden.
Keywords: Public Finance, Bargaining
JEL Classification: H41, C78
Suggested Citation: Suggested Citation
Choi, Hak, Lindahl's Confusing Marginal Utility Theory (October 28, 2015). Available at SSRN: https://ssrn.com/abstract=2682888 or http://dx.doi.org/10.2139/ssrn.2682888
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