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Getting the Ball Rolling: Voluntary Contributions to a Large-Scale Public Project

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  • HUSEYIN YILDIRIM
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    Abstract

    This paper examines dynamic voluntary contributions to a large-scale project. In equilibrium, contributions are influenced by the interplay of two opposing incentives. While agents prefer to free ride on others for contributions, they also prefer to encourage others to contribute by increasing their own. Main findings of the paper are that (1) agents increase their contributions as the project moves forward; (2) as additional agents join the group, existing agents increase their contributions in the initial stages of the project while reducing them in the stages close to completion; (3) groups that are formed by more patient agents and that undertake larger projects tend to be larger; and (4) groups that rely on voluntary contributions tend to be too small compared to the social optimum. The empirical evidence on contributions to open-source software projects provides partial support for these findings. Copyright 2006 Blackwell Publishing, Inc..

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    Bibliographic Info

    Article provided by Association for Public Economic Theory in its journal Journal of Public Economic Theory.

    Volume (Year): 8 (2006)
    Issue (Month): 4 (October)
    Pages: 503-528

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    Handle: RePEc:bla:jpbect:v:8:y:2006:i:4:p:503-528

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    Cited by:
    1. Debashis Pal & Arup Bose & David Sappington, 2008. "Asymmetric Treatment of Identical Agents in Teams," University of Cincinnati, Economics Working Papers Series, University of Cincinnati, Department of Economics 2008-08, University of Cincinnati, Department of Economics.
    2. Steven A. Matthews, 2008. "Achievable Outcomes in Smooth Dynamic Contribution Games," PIER Working Paper Archive 08-028, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
    3. Steven A. Matthews, 2008. "Achievable Outcomes of Dynamic Contribution Games, Second Version," PIER Working Paper Archive 11-016, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania, revised 20 Jun 2011.

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