Exclusion and moral hazard. The case of identical demand

Emilson C.D. Silva, Charles M. Kahn

Research output: Contribution to journalArticlepeer-review


This paper examines the problem of costly exclusion of individuals from a public good. Previous analyses of exclusion have treated it as solely a question of technologies; in our analysis exclusion depends on technology and incentives. In this paper providers of the good design a mechanism to provide an optimal level of deterrence to free riders. If individuals are heterogeneous optimal deterrence may allow some free riders. We examine the effect of costs of exclusion on the Samuelson condition for optimal provision, and see that the desire to deter free riding leads to underprovision of the good irrespective of the degree of rivalry of the good.

Original languageEnglish (US)
Pages (from-to)217-235
Number of pages19
JournalJournal of Public Economics
Issue number2
StatePublished - Sep 1993

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics


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