THE EFFECTS OF UNCERTAINTY ON THE VOLUNTARY PRIVATE PROVISION OF IMPURE PUBLIC GOODS

2009 ◽  
Vol 54 (01) ◽  
pp. 61-73
Author(s):  
ILTAE KIM
Keyword(s):  
Public Goods ◽  
Public Good ◽  
Free Riding ◽  
Collective Good ◽  
Private Provision ◽  
The Public ◽  
Voluntary Provision ◽  
Impure Public Goods ◽  
Impure Public Good ◽  
Increase In Risk

This paper examines the effects of uncertainty on an individual's own contribution to the provision of the collective good using an impure public good model. Two types of uncertainty analyzing free-riding behavior are evaluated: (i) uncertainty surrounding the contributions of others to the public characteristic and (ii) uncertainty surrounding the response of others to an individual's own contribution. We extend previous studies by examining both the compensated and uncompensated effects of increases in such risks on the provision of the collective good. We also establish the conditions that are sufficient to determine both compensated and the total, uncompensated effects of an increase in risk on the voluntary provision of the collective good.

A Case for Private Provision but Collective Ownership of Public Goods

1998 ◽  
Vol 42 (1) ◽  
pp. 90-94 ◽  
Author(s):  
William D. Gerdes
Keyword(s):  
Public Goods ◽  
Public Good ◽  
Private Provision ◽  
The Public ◽  
Collective Ownership ◽  
Free Ride ◽  
Voluntary Exchange

One strategy for generating Pareto results in a public good model is to create an environment where traders internalize the public good externality. The model presented here accomplishes this by separating the provision and ownership of public goods. Such goods are privately provided but collectively owned. Under this arrangement, Lindahl prices are generated through the voluntary exchange activities of consumers. Persistent attempts to free ride are not consistent with maximizing behavior which leads to internalization.

From Lindahl’s Garden to Global Warming: How Useful is the Lindahl Approach in the Context of Global Public Goods?

2006 ◽  
Vol 24 (2) ◽  
pp. 81-98
Author(s):  
Thorsten Giersch
Keyword(s):  
Global Warming ◽  
Public Goods ◽  
Cost Sharing ◽  
Collective Good ◽  
Cournot Model ◽  
Global Public Goods ◽  
Subtle Difference ◽  
Private Provision ◽  
Voluntary Provision ◽  
The Cost

Abstract In what sense is the Lindahl approach useful for analyzing global public goods? After introducing the positive and normative parts of the Lindahl approach we look at the relation to the Nash-Cournot model of voluntary provision. An integration of both blurs the subtle difference between an explicit bargain about the cost sharing and the implicit bargain by providing individual quantities of the collective good. We take a closer look on the possible relevance of this difference in relation to problems of global public goods that are usually seen more in line with a private provision process not envisaged by Lindahl.

scholarly journals Classroom Games: Voluntary Provision of a Public Good

1997 ◽  
Vol 11 (4) ◽  
pp. 209-215 ◽  
Author(s):  
Charles A Holt ◽  
Susan K Laury
Keyword(s):  
Public Goods ◽  
Public Good ◽  
Fund Raising ◽  
Public Goods Game ◽  
Role Of Government ◽  
The Public ◽  
Voluntary Provision ◽  
Good Problem

This paper describes a simple public goods game, implemented with playing cards in a classroom setup. Students choose whether to contribute to the provision of a public good in a situation where it is privately optimal not to contribute, but socially optimal to contribute fully. This exercise motivates discussion of altruism, strategies for private fund-raising, and the role of government in resolving the public good problem.

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.

Ethnic trust, minority status, and public goods in post-conflict societies

2021 ◽  
pp. 002234332098421
Author(s):  
Sam Whitt
Keyword(s):  
Public Goods ◽  
Public Good ◽  
Intergroup Contact ◽  
Minority Group ◽  
Civil Liberties ◽  
Minority Status ◽  
The Public ◽  
Attitudes And Behaviors ◽  
Post Conflict ◽  
History Of

This study considers how ethnic trust and minority status can impact the ability of ethnic groups to pursue cooperative public goods, focusing on groups with a history of conflict and lingering hostility. A public good experiment between ethnic Albanians and Serbs in postwar Kosovo reveals that subjects contribute far more to a mutually beneficial public good when they are part of an experimentally induced coethnic majority. However, when in the minority, subjects not only underinvest, but many actively divest entirely, privatizing the public good. Majority/minority status also has wide-ranging implications for how individuals relate to real-world public goods and the institutions of government that provide them. Compared to majority Albanians, survey data indicate how minority Serbs in Kosovo express greater safety and security concerns, feel more politically, socially, and economically excluded, are more dissatisfied with civil liberties and human rights protections, and are less likely to participate politically or pay taxes to support public goods. Conflict-related victimization and distrust of out-groups are strong predictors of these minority group attitudes and behaviors. This suggests a mechanism for how conflict amplifies out-group distrust, increasing parochial bias in public good commitments, especially among minorities who are wary of exploitation at the hands of an out-group majority. To restore trust, this study finds that institutional trust and intergroup contact are important to bridging ethnic divides that inhibit public good cooperation.

A Model of Inequality Aversion and Private Provision of Public Goods

2020 ◽  
Vol 20 (2) ◽  
Author(s):  
Hide-Fumi Yokoo
Keyword(s):  
Public Goods ◽  
Public Good ◽  
Theoretical Foundation ◽  
Inequality Aversion ◽  
Public Good Provision ◽  
Marginal Rate ◽  
Private Provision ◽  
Marginal Rate Of Substitution ◽  
Good Provision ◽  
Corner Solutions

AbstractI develop a model of inequality aversion and public goods that allows the marginal rate of substitution to be variable. As a theoretical foundation, utility function of the standard public goods model is nested in the Fehr-Schmidt model. An individual’s contribution function for a public good is derived by solving the problem of kinky preference and examining both interior and corner solutions. Results show that the derived contribution function is not monotonic with respect to the other individual’s provision. Thus, the model can be used to explain empirical evidence for the effect of social comparison on public-good provision.

scholarly journals Shame and honour drive cooperation

2011 ◽  
Vol 7 (6) ◽  
pp. 899-901 ◽  
Author(s):  
Jennifer Jacquet ◽  
Christoph Hauert ◽  
Arne Traulsen ◽  
Manfred Milinski
Keyword(s):  
Public Goods ◽  
Public Good ◽  
Tragedy Of The Commons ◽  
Experimental Paradigm ◽  
The Public ◽  
Common Resources ◽  
Public Goods Experiments ◽  
The Commons

Can the threat of being shamed or the prospect of being honoured lead to greater cooperation? We test this hypothesis with anonymous six-player public goods experiments, an experimental paradigm used to investigate problems related to overusing common resources. We instructed the players that the two individuals who were least generous after 10 rounds would be exposed to the group. As the natural antithesis, we also test the effects of honour by revealing the identities of the two players who were most generous. The non-monetary, reputational effects induced by shame and honour each led to approximately 50 per cent higher donations to the public good when compared with the control, demonstrating that both shame and honour can drive cooperation and can help alleviate the tragedy of the commons.

scholarly journals Heterogeneous groups cooperate in public good problems despite normative disagreements about individual contribution levels

2020 ◽  
Vol 10 (1) ◽  
Author(s):  
Kasper Otten ◽  
Vincent Buskens ◽  
Wojtek Przepiorka ◽  
Naomi Ellemers
Keyword(s):  
Public Goods ◽  
Public Good ◽  
Individual Contribution ◽  
Public Goods Game ◽  
Homogeneous Groups ◽  
The Public ◽  
Heterogeneous Groups ◽  
Good Provision ◽  
Good Individual

Abstract Norms can promote human cooperation to provide public goods. Yet, the potential of norms to promote cooperation may be limited to homogeneous groups in which all members benefit equally from the public good. Individual heterogeneity in the benefits of public good provision is commonly conjectured to bring about normative disagreements that harm cooperation. However, the role of these normative disagreements remains unclear because they are rarely directly measured or manipulated. In a laboratory experiment, we first measure participants’ views on the appropriate way to contribute to a public good with heterogeneous returns. We then use this information to sort people into groups that either agree or disagree on these views, thereby manipulating group-level disagreement on normative views. Participants subsequently make several incentivized contribution decisions in a public goods game with peer punishment. We find that although there are considerable disagreements about individual contribution levels in heterogeneous groups, these disagreements do not impede cooperation. While cooperation is maintained because low contributors are punished, participants do not use punishment to impose their normative views on others. The contribution levels at which groups cooperate strongly relate to the average normative views of these groups.

Estimating Free-Riding Behavior: The StratAM Model

2011 ◽  
Vol 19 (4) ◽  
pp. 488-502 ◽  
Author(s):  
Martin C. Steinwand
Keyword(s):  
Cold War ◽  
Public Goods ◽  
Foreign Aid ◽  
Good Governance ◽  
Free Riding ◽  
Public Goods Provision ◽  
Developmental Needs ◽  
Impure Public Goods ◽  
Sar Model ◽  
Spatial Autoregressive

Spatial statistical methods in political science provide a tool to deal with spatial and other forms of interdependence in observational data. In this article, I derive a statistical model from a game of impure public goods provision. The resulting strategic autoregressive model (StratAM) allows the researcher to systematically explore the sources of free-riding behavior in the provision of public goods. The StratAM model is tightly related to the well-known spatial autoregressive (SAR) model and can be estimated in a maximum likelihood framework. I demonstrate the use of the StratAM model by analyzing free riding in the provision of foreign aid. Indicators of developmental needs and good governance strongly increase free-riding during the 1990s. Free-riding patterns in the 2000s are more similar to Cold War patterns.

scholarly journals Walk the Talk? The Effect of Voting and Excludability in Public Goods Experiments

2010 ◽  
Vol 2010 ◽  
pp. 1-15 ◽  
Author(s):  
Hans J. Czap ◽  
Natalia V. Czap ◽  
Esmail Bonakdarian
Keyword(s):  
Public Goods ◽  
Public Good ◽  
Driving Forces ◽  
Public Project ◽  
The Public ◽  
Public Projects ◽  
Individual Contributions ◽  
The Individual ◽  
Other Regarding

The purpose of this paper is to investigate the effect of voting and excludability on individual contributions to group projects. We conducted two experiments on excludable and nonexcludable public goods, which provided several important results. First, contrary to our expectations, subjects are generally contributing more to the non-excludable compared to the excludable public good. Second, participating in a vote to choose a public project per se makes no difference in contributions. However, if the project that the individual voted for also gets selected by the group, they contribute significantly more to that project. Third, empathy and locus of control are important driving forces of participation in common projects. Our results have implications on the procedural design of obtaining funding for public projects. First, the public should get involved and have a say in the determination of which project should be realized. Second, it might well pay off to attempt to develop a consensus among the population and obtain near unanimous votes, because in our experiment, subjects discriminate between the project they voted for and the project chosen by the majority. Third, the policy proposers should stress the other-regarding interest of the public good rather than just pecuniary incentives.

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