Defining Nash Equilibrium: The study introduces the concept of Nash equilibrium for the case of several public goods, where each consumer can contribute non-negative amounts to any of the public goods.
Neutrality Theorem: The research establishes a neutrality theorem (Theorem 7) that addresses the impact of wealth redistribution among contributors to multiple public goods. The theorem’s conditions ensure that total wealth remains constant for contributors to each public good. If these conditions are met, the study demonstrates that after redistribution, a Nash equilibrium exists where the total supply of each public good and individual consumption remains unchanged.
Applications and Implications:
- Voluntary Income Redistribution: The study suggests applying the neutrality theorem to model voluntary income redistribution within “families” where contributors are concerned about each other’s consumption.
- Political Campaign Contributions: By framing contributions to political parties as pure public goods, the study asserts that small redistributions among contributors to rival parties will not alter total contributions.
Conclusion: This research expands the understanding of public goods provision dynamics by incorporating multiple public goods and exploring the implications of wealth redistribution. The neutrality theorem offers a valuable tool for analyzing the effects of redistributions on equilibrium outcomes, providing insights into various applications, from voluntary income redistribution to political contributions and macroeconomic policies.
