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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Paper provided by Graduate School of Economics and Business Administration, Hokkaido University in its series Discussion paper series. A with number
194.
Find related papers by JEL classification: C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games D64 - Microeconomics - - Welfare Economics - - - Altruism H41 - Public Economics - - Publicly Provided Goods - - - Public Goods