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The Conditional Contribution Mechanism for the Provision of Public Goods

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  • Reischmann, Andreas

Abstract

Many mechanisms have been designed to solve the free-rider problem in public good environments. The designers of those mechanisms focused on good static equilibrium properties. In this paper, I propose a new mechanism for the provision of public goods that has good dynamic properties instead. The mechanism gives all agents the possibility to condition their contribution on the total level of contribution provided by all agents. Under a reasonable variant of Better Response Dynamics all equilibrium outcomes are Pareto efficient. This makes the mechanism particularly suited for repeated public good environments. In contrast to many previously suggested mechanisms, it does further not require an institution that has the power to enforce participation and/or transfer payments. Neither does it use any knowledge of agents preferences.

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  • Reischmann, Andreas, 2015. "The Conditional Contribution Mechanism for the Provision of Public Goods," Working Papers 0586, University of Heidelberg, Department of Economics.
    • Handle: RePEc:awi:wpaper:0586
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    References listed on IDEAS

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    15. Smith, Vernon L, 1980. "Experiments with a Decentralized Mechanism for Public Good Decisions," American Economic Review, American Economic Association, vol. 70(4), pages 584-599, September.
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    Cited by:

    1. Reischmann, Andreas & Oechssler, Joerg, 2018. "The Binary Conditional Contribution Mechanism for public good provision in dynamic settings — Theory and experimental evidence," Journal of Public Economics, Elsevier, vol. 159(C), pages 104-115.
    2. Reischmann, Andreas, 2015. "Conditional vs. Voluntary Contribution Mechanism – An Experimental Study," Working Papers 0587, University of Heidelberg, Department of Economics.

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