Individual Responsibility and the Funding of Collective Goods
AbstractWhen a deficit occurs in the funding of collective goods, it is usually covered by raising the amount of taxes or by rationing the supply of the goods. This article compares the efficiency of these institutions. We report the results of a 2x2 experiment based on a game in the first stage of which subjects can voluntarily contribute to the funding of a collective good that is being used to compensate the victims of a disaster. In the second stage of the game, in case of a deficit, we introduce either taxation or rationing. Each treatment is subjected to two conditions: the burden of the deficit is either uniform for all the subjects, or individualized according to the first-stage contribution. We show that the individualized treatments favor the provision of the collective good through voluntary cooperation whereas the uniform treatments encourage free-riding. Individualized taxation brings the voluntary contributions closer to the optimum while uniform rationing appears to be the worst system since free-riding restrains the provision of the good.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Groupe d'Analyse et de Théorie Economique (GATE), Centre national de la recherche scientifique (CNRS), Université Lyon 2, Ecole Normale Supérieure in its series Working Papers with number 0718.
Length: 43 pages
Date of creation: Sep 2007
Date of revision:
Contact details of provider:
Postal: 93, chemin des Mouilles - B.P.167 69131 - Ecully cedex
Phone: 33(0)472 29 30 89
Fax: 33(0)47229 30 90
Web page: http://www.gate.cnrs.fr/
More information through EDIRC
collective goods; experiment; interior Pareto optimum; rationing; responsibility; taxation;
Other versions of this item:
- Louis Lévy-Garboua & Claude Montmarquette & Marie-Claire Villeval, 2007. "Individual Responsibility and the Funding of Collective Goods," CIRANO Working Papers 2007s-18, CIRANO.
- Louis Lévy-Garboua & Claude Montmarquette & Marie-Claire Villeval, 2007. "Individual Responsibility and the Funding of Collective Goods," UniversitÃ© Paris1 PanthÃ©on-Sorbonne (Post-Print and Working Papers) halshs-00175065, HAL.
- Louis Lévy-Garboua & Claude Montmarquette & Marie-Claire Villeval, 2007. "Individual Responsibility and the Funding of Collective Goods," UniversitÃ© Paris1 PanthÃ©on-Sorbonne (Post-Print and Working Papers) halshs-00174557, HAL.
- Lévy-Garboua, Louis & Montmarquette, Claude & Villeval, Marie Claire, 2007. "Individual Responsibility and the Funding of Collective Goods," IZA Discussion Papers 3041, Institute for the Study of Labor (IZA).
- C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
- H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
- H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
- H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-09-16 (All new papers)
- NEP-CBE-2007-09-16 (Cognitive & Behavioural Economics)
- NEP-EXP-2007-09-16 (Experimental Economics)
- NEP-HAP-2007-09-16 (Economics of Happiness)
- NEP-PBE-2007-09-16 (Public Economics)
- NEP-SOC-2007-09-16 (Social Norms & Social Capital)
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.:
- Chan, Kenneth S. & Mestelman, Stuart & Muller, R. Andrew, 2008.
"Voluntary Provision of Public Goods,"
Handbook of Experimental Economics Results,
- Kenneth S. Chan & Stuart Mestelman & R. Andrew Muller, 1998. "Voluntary Provision of Public Goods," McMaster Experimental Economics Laboratory Publications 1998-02, McMaster University.
- Willinger, Marc & Ziegelmeyer, Anthony, 1999.
"Framing and cooperation in public good games: an experiment with an interior solution,"
Elsevier, vol. 65(3), pages 323-328, December.
- Marc WILLINGER & Anthony ZIEGELMEYER, 1999. "Framing and cooperation in public good games: an experiment with an interior solution," Working Papers of BETA 9901, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
- Tatsuyoshi Saijo & Hideki Nakamura, 2001. "The 'Spite' Dilemma in Voluntary Contribution Mechanism Experiments," Levine's Working Paper Archive 563824000000000155, David K. Levine.
- Andreoni, James, 1993.
"An Experimental Test of the Public-Goods Crowding-Out Hypothesis,"
American Economic Review,
American Economic Association, vol. 83(5), pages 1317-27, December.
- Keser, Claudia, 1996. "Voluntary contributions to a public good when partial contribution is a dominant strategy," Economics Letters, Elsevier, vol. 50(3), pages 359-366, March.
- Georg Kirchsteiger & Clemens Puppe, 1997.
"On the possibility of efficient private provision of public goods through government subsidies,"
ULB Institutional Repository
2013/5913, ULB -- Universite Libre de Bruxelles.
- Kirchsteiger, Georg & Puppe, Clemens, 1997. "On the possibility of efficient private provision of public goods through government subsidies," Journal of Public Economics, Elsevier, vol. 66(3), pages 489-504, December.
- Georg KIRCHSTEIGER & Clemens PUPPE, 1996. "On the Possibility of Efficient Private Provision of Public Goods through Government Subsidies," Vienna Economics Papers vie9608, University of Vienna, Department of Economics.
- Sefton, Martin & Steinberg, Richard, 1996. "Reward structures in public good experiments," Journal of Public Economics, Elsevier, vol. 61(2), pages 263-287, August.
- Roberto Burlando & Francesco Guala, 2005. "Heterogeneous Agents in Public Goods Experiments," Experimental Economics, Springer, vol. 8(1), pages 35-54, April.
- Dawes, Robyn M & Thaler, Richard H, 1988. "Anomalies: Cooperation," Journal of Economic Perspectives, American Economic Association, vol. 2(3), pages 187-97, Summer.
- Goeree, Jacob K. & Holt, Charles A. & Laury, Susan K., 2002. "Private costs and public benefits: unraveling the effects of altruism and noisy behavior," Journal of Public Economics, Elsevier, vol. 83(2), pages 255-276, February.
- Kenneth Chan & Stuart Mestelman & Robert Moir & R. Muller, 1999.
"Heterogeneity and the Voluntary Provision of Public Goods,"
Springer, vol. 2(1), pages 5-30, August.
- Kenneth S. Chan & Stuart Mestelman & Rob Moir & R. Andrew Muller, 1998. "Heterogeneity and the Voluntary Provision of Public Goods," Department of Economics Working Papers 1998-04, McMaster University.
- Roberts, Russell D, 1987. "Financing Public Goods," Journal of Political Economy, University of Chicago Press, vol. 95(2), pages 420-37, April.
- Bergstrom, Theodore & Blume, Lawrence & Varian, Hal, 1986. "On the private provision of public goods," Journal of Public Economics, Elsevier, vol. 29(1), pages 25-49, February.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Nelly Wirth).
If references are entirely missing, you can add them using this form.