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Discrete Public goods with incomplete information

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Author Info

  • Flavio Menezes

    (ANU)

  • Paulo Klinger Monteiro

    (IMPA)

  • Akram Temimi

Abstract

We analyze simultaneous discrete public good games with incomplete information and continuous contributions. To use the terminology of Admati and Perry (1991), we consider contribution and subscription games. In the former, contributions are not refunded if the project is not completed, while in the latter they are. We provide necessary conditions that increasing equilibria of contribution games and subscription games must satisfy for general distribution functions. We then characterize a symmetric equilibrium of the subscription game when valuations are uniformly distributed. Our analysis shows that there is a significant difference between the equilibrium outcomes of the two games. In fact, we show that for the contribution game, ``contributing zero'' is the only equilibrium for a general family of distributions.

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File URL: http://128.118.178.162/eps/mic/papers/9901/9901004.pdf
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Bibliographic Info

Paper provided by EconWPA in its series Microeconomics with number 9901004.

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Length: 19 pages
Date of creation: 21 Jan 1999
Date of revision: 06 Jul 1999
Handle: RePEc:wpa:wuwpmi:9901004

Note: Type of Document - Postscript file; prepared on IBM PC - PC- TEX; to print on HP; pages: 19
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Web page: http://128.118.178.162

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Keywords: public goods; incomplete information;

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  1. 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.
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Cited by:
  1. Klemperer, Paul, 2000. "Why every Economist should Learn some Auction Theory," CEPR Discussion Papers 2572, C.E.P.R. Discussion Papers.

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