Cost-Sharing Mechanism for Excludable Goods With Generalized Non-Rivalry

Abstract

Both excludable public goods with non-rivalry and private goods with network externalities have a coordination problem.

In this study, we define generalized non-rivalry to investigate coordination mechanisms for both types of goods.

We focus on the equal cost-sharing with maximal participation (ECSMP) mechanism, which has been studied as a mechanism for excludable public goods with non-rivalry, and we find that this mechanism is optimal with respect to two welfare criteria in an environment with generalized non-rivalry. Moreover, we characterize the ECSMP mechanism within this environment.