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Stackelberg leadership and transfers in private provision of public goods

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Author Info

  • (*), Kai A. Konrad

    (Department of Economics, Freie UniversitÄt Berlin, Boltzmannstrasse 20, D-14195 Berlin, Germany)

  • Wolfgang Buchholz

    (Department of Economics, UniversitÄt Regensburg, D-93040 Regensburg, Germany)

  • Kjell Erik Lommerud

    (Department of Economics, Universitetet i Bergen, Fosswinckels gate 6, N-5007 Bergen, Norway)

Abstract

We consider transfers in a Stackelberg game of private provision of a public good. It turns out that the agent who is the follower in the process of making voluntary contributions to a public good may have an incentive to make monetary transfers to the Stackelberg leader even in a situation where neither has a comparative advantage in making contributions to the public good. The Stackelberg leader is willing to accept such transfers if the actual contribution game is fully non-cooperative because the transfer generates a Pareto superior outcome. If the contributions in the Stackelberg equilibrium is the threat point of a possible cooperative Nash bargaining game, the Stackelberg leader will refuse to accept the transfer if she can.

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Bibliographic Info

Article provided by Springer in its journal Review of Economic Design.

Volume (Year): 3 (1997)
Issue (Month): 1 ()
Pages: 29-43

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Handle: RePEc:spr:reecde:v:3:y:1997:i:1:p:29-43

Note: Received: 30 June 1995 / Accepted: 18 February 1997
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Related research

Keywords: Voluntary provision of public goods; Stackelberg games;

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Cited by:
  1. Vicary, Simon & Sandler, Todd, 2002. "Weakest-link public goods: Giving in-kind or transferring money," European Economic Review, Elsevier, vol. 46(8), pages 1501-1520, September.
  2. Giuseppe Russo & Luigi Senatore, 2011. "A Note on Contribution Games with Loss Functions," CSEF Working Papers 302, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
  3. Matthew O. Jackson & Simon Wilkie, 2005. "Endogenous Games and Mechanisms: Side Payments Among Players," Review of Economic Studies, Oxford University Press, vol. 72(2), pages 543-566.
  4. Miriam Beblo & Julio Robledo, 2008. "The wage gap and the leisure gap for double-earner couples," Journal of Population Economics, Springer, vol. 21(2), pages 281-304, April.
  5. Kessing, Sebastian Georg, 2003. "Delay in joint projects," Discussion Papers, Research Unit: Market Processes and Governance SP II 2003-15, Social Science Research Center Berlin (WZB).
  6. Andaluz, Joaquín & Marcén, Miriam & Molina, José Alberto, 2008. "Dynamics of Intrahousehold Bargaining," IZA Discussion Papers 3757, Institute for the Study of Labor (IZA).
  7. Clemens Puppe & Rudolf Kerschbamer, 2001. "Sequential contributions to public goods: on the structure of the equilibrium set," Economics Bulletin, AccessEcon, vol. 8(3), pages 1-7.
  8. Rudolf Kerschbamer & Clemens Puppe, 1998. "Voluntary contributions when the public good is not necessarily normal," Journal of Economics, Springer, vol. 68(2), pages 175-192, June.

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