| Sumario: | The focus of the article is a comparison of the efficiency characteristics of two facility ownership arrangements private and common ownership. This article concerns a class of facilities or resources whose services to users decrease in value with an increase in the number of users. They will be called congestion-prone facilities. In this article, a model of congestion-prone facilities is presented. It is more general in terms of the variety of institutional arrangements represented than that of the earlier contributors. One of its features is explicit inclusion of congestion effects in the facility demand function. This simplifies analysis by eliminating the separate "external cost" function frequently seen in models of externality problems. The article compares the facility use levels under each ownership regime to the optimum. Aside from presenting the sufficient condition mentioned above, conditions leading to over and undercongestion with private ownership are isolated. It compares the efficiency of the two regimes with each other and presents "qualitative," theoretical conditions associated with the superiority of each.
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