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Rank‐Order Competition In The Voluntary Provision Of Impure Public Goods

Author

Listed:
  • Andrej Angelovski
  • Tibor Neugebauer
  • Maroš Servátka

Abstract

Publicly provided goods often create differential payoffs due to timely or spatial distances of group members. We design and test a provision mechanism which utilizes rank competition to mitigate free‐riding in impure public goods. In our Rank‐Order Voluntary Contribution Mechanism (Rank‐Order‐VCM) group members compete via observable contributions for a larger share of the public good; high contributors receive preferential access (a larger share), while low contributors receive restricted access (a lower share). In a laboratory experiment, Rank‐Order‐VCM elicits median contributions equal to the full endowment throughout the finitely played games with constant groups. In the control treatment, with randomly assigned ranks, the contributions are significantly lower and decline over time. We thus provide evidence of rank competition, in situations where discriminatory access to public goods is possible, being efficiency enhancing. (JEL C91, H41)

Suggested Citation

  • Andrej Angelovski & Tibor Neugebauer & Maroš Servátka, 2019. "Rank‐Order Competition In The Voluntary Provision Of Impure Public Goods," Economic Inquiry, Western Economic Association International, vol. 57(4), pages 2163-2183, October.
    • Handle: RePEc:bla:ecinqu:v:57:y:2019:i:4:p:2163-2183
    DOI: 10.1111/ecin.12797
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    Citations

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    Cited by:

    1. Luke Boosey & R. Mark Isaac & Abhijit Ramalingam, 2021. "Limiting the Leader: Fairness Concerns in Team Production with Leader-Determined Monitoring," Working Papers 21-11, Department of Economics, Appalachian State University.
    2. Natalie Struwe & James M. Walker & Esther Blanco, 2021. "Competition Among Public Good Providers for Donor Rewards," Working Papers 2021-29, Faculty of Economics and Statistics, Universität Innsbruck.
    3. Yansong Li & Zhenliang Liu & Yuqian Wang & Edmund Derrington & Frederic Moisan & Jean-Claude Dreher, 2023. "Spillover effects of competition outcome on future risky cooperation," Post-Print hal-04325682, HAL.

    More about this item

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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