Pareto-Improving Redistribution and Pure Public Goods

2000 ◽  
Vol 1 (2) ◽  
pp. 169-186 ◽  
Author(s):  
Richard Cornes ◽  
Todd Sandler
Keyword(s):  
Public Good ◽  
Well Being ◽  
Policy Intervention ◽  
Public Good Provision ◽  
Large Aggregate ◽  
The Public ◽  
Pure Public Good ◽  
Comparative Static Analysis ◽  
Good Provision ◽  
Pareto Improving

Abstract In the pure public good model, the Nash equilibrium associated with one initial income distribution may Pareto dominate the equilibrium associated with another distribution of the same aggregate income. We explore this possibility and examine its implications for Pareto-improving policy intervention by undertaking a comparative static analysis of Pareto-improving tax-financed increases in pure public good provision. Under some circumstances, a government can engineer policies that raise public good provision while increasing the well-being of contributors and noncontributors. Crucial factors promoting this outcome involve a large number of noncontributors, a high marginal valuation for the public good by non-contributors and a large aggregate response of contributors to changes in their income.

scholarly journals Social Pressure in Networks Induces Public Good Provision

Games ◽  
2021 ◽  
Vol 12 (1) ◽  
pp. 4
Author(s):  
David Jimenez-Gomez
Keyword(s):  
Public Good ◽  
Small Group ◽  
Dynamic Model ◽  
Network Topology ◽  
Social Pressure ◽  
Public Good Provision ◽  
Public Good Game ◽  
The Public ◽  
Best Response ◽  
Good Provision

I develop a dynamic model with forward looking agents, and show that social pressure is effective in generating provision in a public good game: after a small group of agents start contributing to the public good, other agents decide to contribute as well due to a fear of being punished, and this generates contagion in the network. In contrast to earlier models in the literature, contagion happens fast, as part of the best response of fully rational individuals. The network topology has implications for whether contagion starts and the extent to which it spreads. I find conditions under which an agent decides to be the first to contribute in order to generate contagion in the network, as well as conditions for contribution due to a self-fulfilling fear of social pressure.

scholarly journals Competing for Recognition through Public Good Provision

2008 ◽  
Vol 8 (1) ◽  
Author(s):  
Mattias K Polborn
Keyword(s):  
Public Good ◽  
Open Source Software ◽  
Public Good Provision ◽  
Competition Effect ◽  
Software Projects ◽  
The Public ◽  
Context Recognition ◽  
Private Providers ◽  
Common Interests ◽  
Good Provision

We consider a setting in which several groups of individuals with common interests (``clubs") compete with each other for recognition by other individuals. Depending on the context, recognition may be expressed by these other individuals joining a club, or choosing one club to admire. Clubs compete by providing a public good. Competition between clubs increases the public good provision level, and a sufficiently strong competition effect may even lead to overprovision. The model thus limits the argument for subsidies to the private providers of public goods. We discuss implications of the model for open-source software projects, university fundraising and infrastructure competition between cities.

The Simple Analytics of Pure Public Good Provision

Economica ◽  
1985 ◽  
Vol 52 (205) ◽  
pp. 103 ◽  
Author(s):  
Richard Cornes ◽  
Todd Sandler
Keyword(s):  
Public Good ◽  
Public Good Provision ◽  
Pure Public Good ◽  
Good Provision

State Preferences and the Provision of Public Goods / Staatspräferenzen und die Bereitstellung öffentlicher Güter

2003 ◽  
Vol 223 (6) ◽  
Author(s):  
Xenia Matschke
Keyword(s):  
Public Goods ◽  
Public Good ◽  
State Parameter ◽  
Public Good Provision ◽  
Relative Importance ◽  
Private Provision ◽  
The Public ◽  
Good Provision ◽  
Parameter Measuring ◽  
State Preferences

SummaryCountries differ substantially in the emphasis on the public sector and the ratio between state consumption and provision of public goods. It seems that these differences are often not well explained by only assuming a heterogeneous population. In this paper, I take differing state preferences as given and investigate how changes in state preferences affect the provision of a public good. The provision of the public good is modelled as a two-stage game with the state and the citizens as players. I find that the Nash equilibrium provision of the public good is independent of a so-called "welfare state" parameter. In contrast, an increase in a parameter measuring the relative importance of public good provision vs. state consumption leads to an increase in the overall public good provision, while private provision declines.

scholarly journals A Dynamic Theory of Public Spending, Taxation, and Debt

2008 ◽  
Vol 98 (1) ◽  
pp. 201-236 ◽  
Author(s):  
Marco Battaglini ◽  
Stephen Coate
Keyword(s):  
Public Good ◽  
Dynamic Theory ◽  
Collective Good ◽  
Public Good Provision ◽  
Tax Rates ◽  
The Public ◽  
Policy Choices ◽  
Pork Barrel ◽  
Good Provision ◽  
Business As Usual

This paper presents a political economy theory of fiscal policy. Policy choices are made by a legislature that can raise revenues via an income tax and by borrowing. Revenues can be used to finance a public good, whose value is stochastic, and pork-barrel spending. Policymaking cycles between a “business- as-usual” regime in which legislators bargain over pork, and a “responsible policymaking” regime in which policies maximize the collective good. Transitions between regimes are brought about by shocks in the value of the public good. Equilibrium tax rates are too high, public good provision is too low, and debt levels are too high. (JEL D72, E62, H20, H50, H60)

scholarly journals Deciding how to decide on public goods provision: The role of instrumental versus intrinsic motives

2021 ◽  
Vol 8 (2) ◽  
pp. 205316802110141
Author(s):  
Philipp Harms ◽  
Claudia Landwehr ◽  
Maximilian Lutz ◽  
Markus Tepe
Keyword(s):  
Public Good ◽  
Intrinsic Value ◽  
Majority Voting ◽  
Public Good Provision ◽  
Experimental Conditions ◽  
The Public ◽  
Second Stage ◽  
Good Provision ◽  
Alternative Decision

What determines citizens’ preferences over alternative decision-making procedures – the personal gain associated with a procedure, or the intrinsic value assigned to it? To answer this question, we present results of a laboratory experiment in which participants select a procedure to decide on the provision of a public good. In the first stage, they choose between majority voting and delegation to a welfare-maximizing algorithm. In the second stage, subjects either vote on the public good provision, or the decision is taken by the algorithm. We define three experimental conditions in which participants receive information about whether a majority in the group faces a positive or negative pay-off from the public good provision, about whether there is a positive group benefit from its provision, or neither kind of information. Findings confirm the importance of instrumental motives in procedural choices. At the same time, however, a significant share of participants chose a procedure that does not maximize their individual benefit. While majority voting seems to be preferred for intrinsic values of fairness and equality, support for delegation to the welfare-maximizing algorithm increases if the group benefit from a public good is known – even in participants who are net payers for its provision.

Group size and the (in)efficiency of pure public good provision

2016 ◽  
Vol 85 ◽  
pp. 272-287 ◽  
Author(s):  
Johannes Diederich ◽  
Timo Goeschl ◽  
Israel Waichman
Keyword(s):  
Public Good ◽  
Group Size ◽  
Public Good Provision ◽  
Pure Public Good ◽  
Good Provision
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