Advanced Search
MyIDEAS: Login to save this paper or follow this series

The Important Thing Is not (Always) Winning but Taking Part: Funding Public Goods with Contests

Contents:

Author Info

  • Marco Faravelli

    ()
    (Department of Economics, University of Milan-Bicocca and Edinburgh School of Economics)

Abstract

This paper considers a public good game with incomplete information a?ected by extreme free-riding. We overcome this problem through the implementation of a contest in which several prizes can be awarded. For any possible distribution of wealth we identify the necessary and su?cient conditions for the equilibrium allocations to be interior for all players. At interior solutions, it is optimal for the social planner to set the last prize equal to zero, but otherwise the total expected welfare is independent of the distribution of the total prize sum among the prizes. We prove that private provision via a contest Pareto-dominates both public provision and private provision via a lottery.

Download Info

If 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.
File URL: http://dipeco.economia.unimib.it/repec/pdf/mibwpaper102.pdf
File Function: First version, 2006
Download Restriction: no

Bibliographic Info

Paper provided by University of Milano-Bicocca, Department of Economics in its series Working Papers with number 102.

as in new window
Length: 22 pages
Date of creation: Nov 2006
Date of revision: Nov 2006
Handle: RePEc:mib:wpaper:102

Contact details of provider:
Postal: Piazza Ateneo Nuovo, 1 Milano 20126
Phone: +39 02 6448 3089
Fax: +39 02 6448 3085
Email:
Web page: http://dipeco.economia.unimib.it
More information through EDIRC

Related research

Keywords:

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

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.:
as in new window
  1. Richard L. Fullerton & R. Preston McAfee, 1999. "Auctioning Entry into Tournaments," Journal of Political Economy, University of Chicago Press, vol. 107(3), pages 573-605, June.
  2. Arye L. Hillman & John G. Riley, 1987. "Politically Contestable Rents and Transfers," UCLA Economics Working Papers 452, UCLA Department of Economics.
  3. Ellingsen, T., 1990. "Strategic Buyers and the Social Cost of Monopoly," Papers 05-90, Norwegian School of Economics and Business Administration-.
  4. Groves, Theodore & Ledyard, John O, 1977. "Optimal Allocation of Public Goods: A Solution to the "Free Rider" Problem," Econometrica, Econometric Society, vol. 45(4), pages 783-809, May.
  5. Baye, Michael R & Kovenock, Dan & de Vries, Casper G, 1993. "Rigging the Lobbying Process: An Application of the All-Pay Auction," American Economic Review, American Economic Association, vol. 83(1), pages 289-94, March.
  6. Luca Corazzini & Marco Faravelli & Luca Stanca, 2007. "A Prize to Give for: An Experiment on Public Good Funding Mechanisms," CRIEFF Discussion Papers 0714, Centre for Research into Industry, Enterprise, Finance and the Firm.
  7. Henrik Orzen, 2005. "Fundraising through Competition: Evidence from the Lab," Discussion Papers 2005-04, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
  8. Kovenock, D. & de Vries, C.G., 1995. "The All-Pay Auction with Complete Information," UFAE and IAE Working Papers 311.95, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
  9. Jacob K. Goeree & Emiel Maasland & Sander Onderstal & John L. Turner, 2005. "How (Not) to Raise Money," Journal of Political Economy, University of Chicago Press, vol. 113(4), pages 897-926, August.
  10. Taylor, Curtis R, 1995. "Digging for Golden Carrots: An Analysis of Research Tournaments," American Economic Review, American Economic Association, vol. 85(4), pages 872-90, September.
  11. Arthur J.H.C. Schram & Sander Onderstal, 2009. "Bidding To Give: An Experimental Comparison Of Auctions For Charity," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 50(2), pages 431-457, 05.
  12. Morgan, John & Sefton, Martin, 2000. "Funding Public Goods with Lotteries: Experimental Evidence," Review of Economic Studies, Wiley Blackwell, vol. 67(4), pages 785-810, October.
  13. Andreoni, James, 1988. "Privately provided public goods in a large economy: The limits of altruism," Journal of Public Economics, Elsevier, vol. 35(1), pages 57-73, February.
  14. Arye Hillman & Dov Samet, 1987. "Dissipation of contestable rents by small numbers of contenders," Public Choice, Springer, vol. 54(1), pages 63-82, January.
  15. Barut, Yasar & Kovenock, Dan, 1998. "The symmetric multiple prize all-pay auction with complete information," European Journal of Political Economy, Elsevier, vol. 14(4), pages 627-644, November.
  16. Moldovanu, Benny & Sela, Aner, 1999. "The Optimal Allocation of Prizes in Contests," Sonderforschungsbereich 504 Publications 99-75, Sonderforschungsbereich 504, Universität Mannheim;Sonderforschungsbereich 504, University of Mannheim.
  17. Lazear, Edward P & Rosen, Sherwin, 1981. "Rank-Order Tournaments as Optimum Labor Contracts," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 841-64, October.
  18. Broecker, Thorsten, 1990. "Credit-Worthiness Tests and Interbank Competition," Econometrica, Econometric Society, vol. 58(2), pages 429-52, March.
  19. Morgan, John, 2000. "Financing Public Goods by Means of Lotteries," Review of Economic Studies, Wiley Blackwell, vol. 67(4), pages 761-84, October.
  20. 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.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Onderstal, Sander & Schram, Arthur J.H.C. & Soetevent, Adriaan R., 2014. "Reprint of: Bidding to give in the field," Journal of Public Economics, Elsevier, vol. 114(C), pages 87-100.
  2. Marco Faravelli & Luca Stanca, 2007. "Single versus Multiple Prize Contests to Finance Public Goods: Theory and Experimental Evidence," Discussion Paper Series, Department of Economics 200715, Department of Economics, University of St. Andrews.
  3. Gregor, Martin, 2012. "Contest for power in organizations," Economics Letters, Elsevier, vol. 114(3), pages 280-283.
  4. Sander Onderstal & Arthur J.C. Schram & Adriaan R. Soetevent, 2011. "Bidding to give in the Field: Door-to-Door Fundraisers had it right from the Start," Tinbergen Institute Discussion Papers 11-070/1, Tinbergen Institute, revised 10 Nov 2011.
  5. Henrik Orzen, 2005. "Fundraising through Competition: Evidence from the Lab," Discussion Papers 2005-04, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
  6. Lucca Corazzini & Marco Faravelli & Lucca Stanca, 2007. "A Prize to Give for: An Experiment on Public Good Funding Mechanisms," ESE Discussion Papers 159, Edinburgh School of Economics, University of Edinburgh.
  7. Jörg Franke & Wolfgang Leininger, 2013. "On the Efficient Provision of Public Goods by Means of Lotteries," CESifo Working Paper Series 4109, CESifo Group Munich.
  8. Sander Onderstal & Arthur J.C. Schram & Adriaan R. Soetevent, 2011. "Bidding to give in the Field: Door-to-Door Fundraisers had it right from the Start," Tinbergen Institute Discussion Papers 11-070/1, Tinbergen Institute, revised 10 Nov 2011.
  9. Fujiwara, Hikojiro & Arai, Kazuhiro, 2008. "Group Competition and Personality in an Experimental Public Goods Game," Hitotsubashi Journal of Economics, Hitotsubashi University, vol. 49(2), pages 149-161, December.
  10. Onderstal, Sander & Schram, Arthur J.H.C. & Soetevent, Adriaan R., 2013. "Bidding to give in the field," Journal of Public Economics, Elsevier, vol. 105(C), pages 72-85.
  11. Faravelli, Marco & Stanca, Luca, 2012. "Single versus multiple-prize all-pay auctions to finance public goods: An experimental analysis," Journal of Economic Behavior & Organization, Elsevier, vol. 81(2), pages 677-688.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:mib:wpaper:102. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roberto Reale).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.