Suman Ghosh () (Department of Economics, College of Business, Florida Atlantic University) Alexander Karaivanov () (Department of Economics, Simon Fraser University) Mandar Oak () (Department of Economics, Williams College)
Additional information is available for the following
registered author(s):
We extend the model of voluntary contributions to multiple public goods by allowing for bundling of the public goods. Specifically, we study the case where agents contribute into a common pool which is then allocated towards the financing of two pure public goods. We explore the welfare implications of allowing for such bundling vis-a-vis a separate contributions scheme. We show that when agents have homogeneous preferences, they cannot be made better off with a bundling scheme. On the contrary, in the generic case when agents are heterogenous in their incomes and preferences, bundling may increase joint welfare compared to a separate contribution scheme, in particular for higher income inequality among the agents. It is interesting to note that the welfare improvement occurs despite a decrease in total contributions. Our findings have implications for the design of charitable institutions and international aid agencies.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
file. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Publisher Info
Paper provided by Department of Economics, College of Business, Florida Atlantic University in its series Working Papers with number
05005.
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Steven N. Durlauf & Marcel Fafchamps, 2004.
"Social Capital,"
NBER Working Papers
10485, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
Durlauf, Steven N. & Fafchamps, Marcel, 2005.
"Social Capital,"
Handbook of Economic Growth,
in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 26, pages 1639-1699
Elsevier.
[Downloadable!] (restricted)