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.

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 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.

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.

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.

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.

scholarly journals Announcements of Support and Public Good Provision

2017 ◽  
Vol 107 (12) ◽  
pp. 3760-3787 ◽  
Author(s):  
Judd B. Kessler
Keyword(s):  
Public Goods ◽  
Field Experiment ◽  
Prosocial Behavior ◽  
Public Good ◽  
Large Scale ◽  
Laboratory Experiments ◽  
Public Good Provision ◽  
Scale Field ◽  
Large Scale Field ◽  
Good Provision

Providing information about contributions to public goods is known to generate further contributions. However, it is often impossible to provide verifiable information on contributions. Through a large-scale field experiment and a series of laboratory experiments, I show that nonbinding announcements of support for a public good encourage others to contribute, even when actual contributions might not or cannot be made. Providing a way to easily announce support for a charity increases donations by $865 per workplace fundraising campaign (or 16 percent of average giving). I discuss implications for understanding prosocial behavior and for organizations aiming to increase contributions to public goods. (JEL C93, D64, D83, H41, L31)

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.

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