The overprovision anomaly of private public good supply

Zusammenfassung

It is well known that private provision of a public good may lead to a higher supply than that in some Pareto optimal allocation. The traditional view attributes this "overprovision anomaly" to a specific kind of preferences. The present paper, however, show's that preferences do not play a decisive role. Assuming normality, overprovision will occur only if the distribution of income is extremely skewed and Pareto optimal allocations are not within the set of cost-share equilibria.