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Quadratic Funding with Incomplete Information

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  • Luis V. M. Freitas
  • Wilfredo L. Maldonado

Abstract

A recently proposed mechanism for the provision of continuous public goods is the so-called quadratic funding mechanism, which has been shown to provide socially optimal outcomes under complete information. In this work we show that the conditions to obtain the same desirable property under incomplete information are strongly restrictive. We also propose two measures for the size of the inefficiency and show how that deadweight loss responds to changes in the size of the population, the valuation of the public good by individuals and the variance of the expected value of contributions to the fund.

Suggested Citation

  • Luis V. M. Freitas & Wilfredo L. Maldonado, 2021. "Quadratic Funding with Incomplete Information," Working Papers, Department of Economics 2021_24, University of São Paulo (FEA-USP).
    • Handle: RePEc:spa:wpaper:2021wpecon24
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    More about this item

    Keywords

    Public goods provision; incomplete information; quadratic funding mechanism;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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