Private Provision of a Discrete Public Good: Efficient Equilibria in the Private-Information Contribution Game

We analyze a symmetric Bayesian game in which two players individually contribute to fund a discrete public good; contributions are refunded if they do not reach a threshold set by the seller of the good. We characterize the distributions of players' private values that can support a symmetric equilibrium in continuous piecewise-linear strategies, and we calculate these strategies. Allowing the seller to charge an entry fee before players make their private contributions, we show these piecewise-linear equilibrium strategies maximize the seller's expected profit over all incentive compatible selling mechanisms.

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Optimal Provision of a Discrete Public Good: Linear Equilibria in the Private-Information Subscription Game

SSRN Electronic Journal ◽

10.2139/ssrn.998046 ◽

2008 ◽

Author(s):

Stefano Barbieri ◽

David A. Malueg

Keyword(s):

Public Good ◽

Private Information ◽

Good Linear ◽

Discrete Public Good

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A Model of Inequality Aversion and Private Provision of Public Goods

The B E Journal of Theoretical Economics ◽

10.1515/bejte-2019-0066 ◽

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.

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A Case for Private Provision but Collective Ownership of Public Goods

The American Economist ◽

10.1177/056943459804200110 ◽

1998 ◽

Vol 42 (1) ◽

pp. 90-94 ◽

Cited By ~ 1

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.

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