TITLE:
Two-Part Tariff Lottery: A Means to Provide Public Good at the Social Optimum
AUTHORS:
Amornrat Apinunmahakul, Vicky Barham
KEYWORDS:
Non-Profit Firms; Lottery; Public Goods; Two-Part Tariff
JOURNAL NAME:
Theoretical Economics Letters,
Vol.2 No.1,
February
23,
2012
ABSTRACT: Pure public goods provided by charitable organizations may be provided at the first-best level when the provision is financed by an appropriately designed lottery. If lottery tickets are sold using a two-part tariff, the level of provision of the public good is greater than when fees are not charged to participate in the lottery. Unlike [13] who asymptotically approach the first-best level of provision with an arbitrarily large prize, a Pareto efficient level of the public good is produced when participation fees for the lottery are set appropriately.