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Coordination and free-riding problems in the provision of multiple public goods

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  • Ai Takeuchi

    (College of Economics, Ritsumeikan University)

  • Erika Seki

    (Graduate School of Economics, Osaka University)

Abstract

This study considers the twin problems of free riding and coordination failure prevailing in the provision of multiple public goods with diminishing marginal returns in which the payoff-sum maximising Pareto optimal outcome requires less-than-full contributions by group members. We examine theoretically and experimentally whether the provision of information on the demand for public goods helps overcome these problems and improves efficiency. We construct a game of two public goods,each with an upper bound on effective contributions. Theoretical analysis predicts that this information improves efficiency as it prompts efficiency concerned individuals to match the upper bound of each public good in equilibrium.The experimental results show countervailing effects of demand information,i.e.,it improves coordination but deteriorates the free-riding problem.

Suggested Citation

  • Ai Takeuchi & Erika Seki, 2020. "Coordination and free-riding problems in the provision of multiple public goods," Discussion Papers in Economics and Business 19-15-Rev., Osaka University, Graduate School of Economics.
    • Handle: RePEc:osk:wpaper:1915r
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    2. Ai Takeuchi & Erika Seki, 2023. "Overcoming problems of coordination and freeriding in a game with multiple public goods: dynamic contribution with information provision," The Japanese Economic Review, Springer, vol. 74(3), pages 379-411, July.

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    More about this item

    Keywords

    Charity; Freeriding; Coordination; Multiplepublicgoods; Laboratoryexperiment; Information.;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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