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Private Provision of Public Goods between Families

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  • CORNES, Richard
  • ITAYA, Jun-ichi
  • TANAKA, Aiko

Abstract

We consider a two-stage voluntary provision model where individuals in a family contribute to inter-family public goods, and, at the same time, the parent makes private transfers to her child within the same family. We show not only that Warr’s neutrality holds regardless of the different timings of parent-to-child transfers, but also that there is a continuum of Nash equilibria in the sense that individuals’ contributions and parental transfers are indeterminate, although the allocation of each’s private consumption and total public good provision is uniquely determined. We further show that, in the presence of impure altruism, neutrality and uniqueness of the equilibrium allocation persist.

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File URL: http://hdl.handle.net/2115/30280
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File URL: http://eprints.lib.hokudai.ac.jp/dspace/bitstream/2115/30280/1/DPA194.pdf
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Bibliographic Info

Paper provided by Graduate School of Economics and Business Administration, Hokkaido University in its series Discussion paper series. A with number 194.

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Length: 30 pages
Date of creation: 18 Dec 2007
Date of revision:
Handle: RePEc:hok:dpaper:194

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Keywords: private provision; public good; Nash equilibrium; subgame perfect equilibrium; family; C72; D64; H41;

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