A Note on the Provision of a Public Service of Different Qualities

• Tác giả: Monica Anna Giovanniello, Simone Tonin
• Ngôn ngữ: eng
• Ký hiệu phân loại: 174.93633 Other professions and occupations
• Thông tin xuất bản: 2020
• Bộ sưu tập: Báo, Tạp chí
• ID: 164162

Tóm tắt

We study how the quality dimension affects the social optimum in a model of spatial differentiation where two facilities provide a public service. If quality enters linearly in the individuals' utility function, a symmetric configuration, in which both facilities have the same quality and serve groups of individuals of the same size, does not maximize the social welfare. This is a surprising result as all individuals are symmetrically identical having the same quality valuation. We also show that a symmetric configuration of facilities may maximize the social welfare if the individuals' marginal utility of quality is decreasing.