On the Edgeworth conjecture for production economies with public goods: A contract-based approach

The paper applies and elaborates a contractual approach to study economies with a production of public goods. The barter contractual approach was developed in Marakulin, 2003, Marakulin, 2011 for exchange economies; it is now modified and extended to the production economy. This includes hereby the introduction of a production contract and the adoption of known earlier notions: a web of contracts, coalitional domination for webs, a partial breaking of contracts, and so on. Thus specific notions of properly contractual and fuzzy contractual allocations for an economy with public goods are introduced and their equivalence with Lindahl equilibria is stated. These theorems can be interpreted as a new way of perfect competition presentation.