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A Note on Contribution Games with Loss Functions

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  • Russo, Giuseppe
  • Senatore, Luigi

Abstract

Decisions on joint funding of continuous public goods between two agents often involve heterogeneous targets. We introduce loss functions in a contribution game in order to study the effect of this conflict. Unlike Varian (1994), joint contribution occurs only if the players’ targets are sufficiently close and the sequential game reduces free riding problems, while total contribution is higher in the simultaneous game.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 33423.

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Date of creation: Aug 2011
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Handle: RePEc:pra:mprapa:33423

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Keywords: Public Goods; Intergovernmental Relations;

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References

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  1. James Andreoni, 1998. "Toward a Theory of Charitable Fund-Raising," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 106(6), pages 1186-1213, December.
  2. Parimal Bag & Santanu Roy, 2011. "On sequential and simultaneous contributions under incomplete information," International Journal of Game Theory, Springer, vol. 40(1), pages 119-145, February.
  3. Warr, Peter G., 1982. "Pareto optimal redistribution and private charity," Journal of Public Economics, Elsevier, vol. 19(1), pages 131-138, October.
  4. Vesterlund, Lise, 2003. "The informational value of sequential fundraising," Journal of Public Economics, Elsevier, vol. 87(3-4), pages 627-657, March.
  5. Simon Gaechter & Daniele Nosenzo & Elke Renner & Martin Sefton, 2009. "Sequential versus simultaneous contributions to public goods: Experimental evidence," Discussion Papers, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham 2009-17, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
  6. (*), Kai A. Konrad & Wolfgang Buchholz & Kjell Erik Lommerud, 1997. "Stackelberg leadership and transfers in private provision of public goods," Review of Economic Design, Springer, vol. 3(1), pages 29-43.
  7. Gächter, Simon & Nosenzo, Daniele & Renner, Elke & Sefton, Martin, 2010. "Sequential vs. simultaneous contributions to public goods: Experimental evidence," Journal of Public Economics, Elsevier, vol. 94(7-8), pages 515-522, August.
  8. Varian, Hal R., 1994. "Sequential contributions to public goods," Journal of Public Economics, Elsevier, vol. 53(2), pages 165-186, February.
  9. Josef Falkinger, 2000. "A Simple Mechanism for the Efficient Provision of Public Goods: Experimental Evidence," American Economic Review, American Economic Association, vol. 90(1), pages 247-264, March.
  10. Cornes, Richard & Sandler, Todd, 1984. "Easy Riders, Joint Production, and Public Goods," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 94(375), pages 580-98, September.
  11. 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.
  12. Warr, Peter G., 1983. "The private provision of a public good is independent of the distribution of income," Economics Letters, Elsevier, vol. 13(2-3), pages 207-211.
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Cited by:
  1. Russo, Giuseppe & Senatore, Luigi, 2011. "Who Contributes? A Strategic Approach to a European Immigration Policy," MPRA Paper 33421, University Library of Munich, Germany.

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