This paper examines the equilibrium provision of a public good if the private monetary contributions of identical agents are (im)pure complements. To reconcile complementarity in contributions with the apparent substitutability of monetary payments, we assume a setup with multiple inputs into a complementary production function. This paper proves the uniqueness and symmetry of the equilibrium for any impure complementarity if each agent is permitted to contribute to any input; in the equilibrium, contributions are strategic substitutes. Only pure complementarity exhibits multiple equilibria, where contributions are either strategic substitutes or strategic complements.
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Article provided by Economics Bulletin in its journal Economics Bulletin.
Find related papers by JEL classification: H0 - Public Economics - - General C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
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