Contributing or Free-Riding? Voluntary Participation in a Public Good Economy
AbstractWe consider a (pure) public goods provision problem with voluntary participation in a quasi-linear economy. We propose a new hybrid solution concept, the free-riding-proof core (FRP-Core), which endogenously determines a contribution group, public goods provision level, and how to share the provision costs. The FRP-Core is always nonempty in public goods economies but does not usually achieve global efficiency. The FRP-Core has support from both cooperative and noncooperative games. In particular, it is equivalent to the set of perfectly coalition-proof Nash equilibria (Bernheim, Peleg, and Whinston, 1987) of a dynamic game with players' participation decisions followed by a common agency game of public goods provision.
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Bibliographic InfoPaper provided by Research Institute of Economy, Trade and Industry (RIETI) in its series Discussion papers with number 11028.
Length: 54 pages
Date of creation: Mar 2011
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Other versions of this item:
- Konishi, Hideo & Furusawa, Taiji, 2011. "Contributing or free-riding? Voluntary participation in a public good economy," Theoretical Economics, Econometric Society, vol. 6(2), May.
- Taiji Furusawa & Hideo Konishi, 2008. "Contributing or Free-Riding? Voluntary Participation in a Public Good Economy," Boston College Working Papers in Economics 681, Boston College Department of Economics, revised 04 Aug 2010.
- Taiji Furusawa & Hideo Konishi, 2010. "Contributing or Free-Riding? Voluntary Participation in a Public Good Economy," Global COE Hi-Stat Discussion Paper Series gd09-128, Institute of Economic Research, Hitotsubashi University.
- C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-04-09 (All new papers)
- NEP-GTH-2011-04-09 (Game Theory)
- NEP-PBE-2011-04-09 (Public Economics)
- NEP-POL-2011-04-09 (Positive Political Economics)
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