| The expanding interest in the private delivery of many public goods and services suggests public provision of public goods need not represent a dominant institution. Basic analysis of private market provision of excludable public goods is needed in order to understand the implications of transfer of service responsibility from the public sector into the private sector. This thesis will provide such an analysis.;We first analyze the impact of differences in the characteristics of the demand preference distribution upon the profit maximizing choices of price and output by private monopolist. We consider two alternative pricing strategies: maximum uniform pricing and optimum uniform pricing. We characterize changes in the homogeneity of the market demand distributions by employing the concept of mean preserving spread distributions.;In our second core chapter, we provide a comparison of public goods allocations under public monopoly and private monopoly. We develop a majority voting ranking of the two alternative modes. In particular, we extend the voting analysis found in Gronberg and Hwang to include a franchise tax. This franchise tax policy increases the probability that a majority of the consumer-votes will support private monopoly provision. We identify conditions under privatization does gain majority support when government can extract some or all of monopolist's profits and redistribute the profit to each consumer uniformly.;Finally, we analyze provision of excludable public goods when they are subject to congestion effects. We again focus upon public monopoly and private monopoly as alternative institutional arrangements for allocating public goods. We define congestion in our model as average utilization, which is total utilization divided by the quantity consumed by each individual. In equilibrium, we find that the consumers will consume lower quality (more congested) public goods under a public regime than under a private monopoly provision regime. The voting results are very similar to the case of noncongestible public goods. Public provision, in general, still dominates private monopoly provision. Private monopoly provision does dominate public provision, however, when a franchise tax is introduced. The possibility of private monopoly provision domination increases when the congestion effects increase. |
