Profit-Maximizing Sale of a Discrete Public Good via the Subscription Game in Private-Information Environments
AbstractWe 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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Bibliographic InfoArticle provided by De Gruyter in its journal The B.E. Journal of Theoretical Economics.
Volume (Year): 10 (2010)
Issue (Month): 1 (February)
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Web page: http://www.degruyter.com
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- Zhi Li & Christopher Anderson & Stephen K. Swallow, 2012. "Uniform Price Mechanisms for Threshold Public Goods Provision: An Experimental Investigation," Working Papers 14, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.
- Murat Yilmaz, 2010. "Auctioning a Discrete Public Good under Incomplete Information," Working Papers 2010/14, Bogazici University, Department of Economics.
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