On the Public and Voluntary Provision of Public Goods

ABSTRACT We extend Bergstrom, Blume, and Varian's (1986) model to a non‐cooperative approach where voluntary contributions and taxes coexist to finance public goods. After obtaining the uniqueness of equilibrium, we present different properties of the outcomes, showing the role that the taxes play and the impact on voluntary contributions. We also identify conditions ensuring neutrality. Finally, we present some remarks on welfare and efficiency, pointing out the second‐best solution and identifying conditions for efficiency.