Leadership in Public Good Provision: A Timing Game Perspective
Abstract
We address in this paper the issue of leadership when two governments provide public goods to their constituencies with cross-border externalities as both public goods are valued by consumers in both countries. We study a timing game between two different countries: before providing public goods, the two policymakers non-cooperatively decide their preferred sequence of moves. We establish conditions under which a first- or second-mover advantage emerges for each country, highlighting the role of spillovers and the complementarity or substitutability of public goods. As a result, we are able to prove that there is no leader when, for both countries, public goods are substitutable. When public goods are complements for both countries, each of them may emerge as the leader in the game. Hence a coordination issue arises. We use the notion of risk-dominance to select the leading government. Finally, in the mixed case, the government for whom public goods are substitutable becomes the leader. Copyright � 2010 Wiley Periodicals, Inc..Download Info
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Bibliographic Info
Article provided by Association for Public Economic Theory in its journal Journal of Public Economic Theory.
Volume (Year): 12 (2010)
Issue (Month): 4 (08)
Pages: 763-787
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Related research
Keywords:Other versions of this item:
- Kempf, H. & Rota Graziosi, G., 2009. "Leadership in Public Good Provision: a Timing Game Perspective," Working papers 240, Banque de France.
- Grégoire Rota-Graziosi & Hubert Kempf, 2011. "Leadership in Public Good Provision: a Timing Game Perspective," Working Papers halshs-00556944, HAL.
- Gr�goire ROTA-GRAZIOSI & Hubert KEMPF, 2008. "Leadership in Public Good Provision: a Timing Game Perspective," Working Papers 200817, CERDI.
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
- E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
- E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
References
References listed on IDEASPlease report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Eric van Damme & Sjaak Hurkens, 1996.
"Endogenous Stackelberg leadership,"
Economics Working Papers
190, Department of Economics and Business, Universitat Pompeu Fabra.
- van Damme, Eric & Hurkens, Sjaak, 1999. "Endogenous Stackelberg Leadership," Games and Economic Behavior, Elsevier, vol. 28(1), pages 105-129, July.
- Damme, E.E.C. van & Hurkens, J.P.M., 1999. "Endogenous Stackelberg leadership," Open Access publications from Tilburg University urn:nbn:nl:ui:12-154410, Tilburg University.
- Damme, E.E.C. van & Hurkens, J.P.M., 1996. "Endogenous Stackelberg Leadership," Discussion Paper 1996-115, Tilburg University, Center for Economic Research.
- Damme, E.E.C. van & Hurkens, S., 1998. "Endogenous Stackelberg leadership," Open Access publications from Tilburg University urn:nbn:nl:ui:12-80496, Tilburg University.
- Bloch, Francis & Zenginobuz, Unal, 2004.
"The Effect of Spillovers on the Provision of Local Public Goods,"
MPRA Paper
186, University Library of Munich, Germany, revised 05 Oct 2006.
- Francis Bloch & Unal Zenginobuz, 2007. "The effect of spillovers on the provision of local public goods," Review of Economic Design, Springer, vol. 11(3), pages 199-216, November.
Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Hoffmann, Magnus & Rota-Graziosi, Grégoire, 2012.
"Endogenous timing in general rent-seeking and conflict models,"
Games and Economic Behavior,
Elsevier, vol. 75(1), pages 168-184.
- Grégoire Rota-Graziosi & Magnus Hoffmann, 2011. "Endogenous Timing in General Rent‐Seeking and Conflict Models," Working Papers halshs-00553119, HAL.
- Hoffmann, Magnus & Rota Graziosi, Gregoire, 2010. "Endogenous Timing in General Rent-Seeking and Conflict Models," MPRA Paper 24084, University Library of Munich, Germany.
- Kempf, Hubert & Rota-Graziosi, Grégoire, 2010. "Endogenizing leadership in tax competition," Journal of Public Economics, Elsevier, vol. 94(9-10), pages 768-776, October.
- Hattori, Keisuke & Kitamura, Takahiro, 2011. "Endogenous Timing in Strategic Environmental Policymaking," MPRA Paper 29337, University Library of Munich, Germany.
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