IMPURE PUBLIC-GOODS AND TRANSFERS IN A 3-AGENT MODEL

This paper extends previous models of non-cooperative private funding of pure public goods by allowing for impure public goods. The analysis is developed in the context of international public goods. Under certain conditions the consequences of transfers on utility are paradoxical. If the preferences are divergent, a country may gain by giving a transfer, the receiver may lose, and these two phenomena may appear at the same time.