Samuelsonian Nonexclusive Goods
Chapter 6 developed the standard pareto-optimal decision rule for a nonexclusive good in a first-best environment, 
, but did not consider the incidence of the good. The incidence is the gain in welfare to each consumer from being able to consume the good at its optimal level, less the loss in welfare from having to finance the good.
, but did not consider the incidence of the good. The incidence is the gain in welfare to each consumer from being able to consume the good at its optimal level, less the loss in welfare from having to finance the good.As a first step in deriving an incidence measure, recall that all government decisions with respect to financing and providing the good are lump-sum events from any one consumer's point of view. Since the market system completely breaks down because of the revelation problem, ...
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