The equivalence of core and cost share equilibria in an economy with a public good (Q1178819)

The authors analyze an economy with a finite number of agents and a public good which is produced from a single input, the private good. Within this framework they prove the equivalence of the core and the set of cost share equilibria, which are allocations that can be supported by a monotonic cost share system. This result extends the findings of \textit{A. Mas-Colell} [Quart. J. Econ. 94, 625-641 (1980; Zbl 0437.90021)] with respect to valuation equilibria. Moreover it is shown that those core allocations which can be supported by a linear cost share method are characterized by uniform bounds on the relative marginal rates of substitution for the public good. This is of importance because these linear cost share equilibria correspond to Lindahl-Foley equilibria.