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Private Provision of a Discrete Public Good: Continuous‐Strategy Equilibria in the Private‐Information Subscription Game

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  • STEFANO BARBIERI
  • DAVID A. MALUEG

Abstract

We reconsider Laussel and Palfrey's analysis of private provision of discrete public goods via the subscription game. We show their semi‐regular equilibria do not exist, casting doubt on their efficiency analysis. Taking players' values for the public good as uniformly distributed on , we exhibit previously unrecognized continuous equilibria—those with contribution strategies strictly increasing up to their maximum values, not necessarily equal to the provision cost, c, at which point they become flat. We show piecewise‐linear equilibria are not incentive efficient; and if and , then all symmetric equilibria are interim incentive inefficient.

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  • Stefano Barbieri & David A. Malueg, 2008. "Private Provision of a Discrete Public Good: Continuous‐Strategy Equilibria in the Private‐Information Subscription Game," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 10(4), pages 529-545, August.
    • Handle: RePEc:bla:jpbect:v:10:y:2008:i:4:p:529-545
    DOI: 10.1111/j.1467-9779.2008.00375.x
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    References listed on IDEAS

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    1. Palfrey, Thomas R. & Rosenthal, Howard, 1984. "Participation and the provision of discrete public goods: a strategic analysis," Journal of Public Economics, Elsevier, vol. 24(2), pages 171-193, July.
    2. Dirk Alboth & Anat Lerner & Jonathan Shalev, 2001. "Profit Maximizing in Auctions of Public Goods," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 3(4), pages 501-525, October.
    3. Didier Laussel & Thomas R. Palfrey, 2003. "Efficient Equilibria in the Voluntary Contributions Mechanism with Private Information," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 5(3), pages 449-478, July.
    4. Alboth, Dirk & Lerner, Anat & Shalev, Jonathan, 2001. "Profit Maximizing in Auctions of Public Goods," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 3(4), pages 501-525.
    5. Anat R. Admati & Motty Perry, 1991. "Joint Projects without Commitment," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 259-276.
    6. John O. Ledyard & Thomas R. Palfrey, 1999. "A Characterization of Interim Efficiency with Public Goods," Econometrica, Econometric Society, vol. 67(2), pages 435-448, March.
    7. Menezes, Flavio M. & Monteiro, Paulo K. & Temimi, Akram, 2001. "Private provision of discrete public goods with incomplete information," Journal of Mathematical Economics, Elsevier, vol. 35(4), pages 493-514, July.
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    Cited by:

    1. Krasteva, Silvana & Yildirim, Huseyin, 2013. "(Un)Informed charitable giving," Journal of Public Economics, Elsevier, vol. 106(C), pages 14-26.
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    3. Murat Yilmaz, 2010. "Auctioning a Discrete Public Good under Incomplete Information," Working Papers 2010/14, Bogazici University, Department of Economics.
    4. Stefano Barbieri & David Malueg, 2014. "Group efforts when performance is determined by the “best shot”," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 56(2), pages 333-373, June.
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    6. Federica Alberti & Anna Cartwright & Edward Cartwright, 2021. "Predicting Efficiency in Threshold Public Good Games: A Learning Direction Theory Approach," Working Papers in Economics & Finance 2021-01, University of Portsmouth, Portsmouth Business School, Economics and Finance Subject Group.
    7. Li, Zhi & Anderson, Christopher M. & Swallow, Stephen, 2012. "Uniform Price Mechanisms for Threshold Public Goods Provision: An Experimental Investigation," Working Paper series 148349, University of Connecticut, Charles J. Zwick Center for Food and Resource Policy.
    8. Altınok, Ahmet & Yılmaz, Murat, 2018. "Dynamic voluntary contribution to a public project under time inconsistency," Journal of Economic Behavior & Organization, Elsevier, vol. 145(C), pages 114-140.
    9. Peyman Khezr & Flavio M. Menezes, 2019. "Funding natural monopoly infrastructure expansion: auctions versus regulated uniform access prices," Journal of Regulatory Economics, Springer, vol. 55(2), pages 193-213, April.
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    11. Toth, Sandor F. & Rabotyagov, Sergey S. & Ettl, Gregory J., 2009. "Experimental Testbeds for ECOSEL: A Market Framework for Private Provision of Forest Ecosystem Services," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49565, Agricultural and Applied Economics Association.
    12. Billur Aksoy & Silvana Krasteva, 2020. "When does less information translate into more giving to public goods?," Experimental Economics, Springer;Economic Science Association, vol. 23(4), pages 1148-1177, December.
    13. Krasteva, Silvana & Yildirim, Huseyin, 2014. "Reprint of: (Un)Informed charitable giving," Journal of Public Economics, Elsevier, vol. 114(C), pages 108-120.
    14. Barbieri Stefano & Malueg David A., 2010. "Profit-Maximizing Sale of a Discrete Public Good via the Subscription Game in Private-Information Environments," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 10(1), pages 1-31, February.
    15. Fuhai Hong & Larry Karp & Tat-How Teh, 2021. "Identity in public goods contribution," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 57(3), pages 617-664, October.
    16. Li, Zhi & Anderson, Christopher M. & Swallow, Stephen K., 2016. "Uniform price mechanisms for threshold public goods provision with complete information: An experimental investigation," Journal of Public Economics, Elsevier, vol. 144(C), pages 14-26.
    17. Zhi Li & Christopher Anderson & Stephen K. Swallow, 2012. "Uniform Price Mechanisms for Threshold Public Goods Provision: An Experimental Investigation," Working Papers 14, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.
    18. Subhasish M. Chowdhury & Iryna Topolyan, 2015. "The Group All-Pay Auction with Heterogeneous Impact Functions," University of East Anglia Applied and Financial Economics Working Paper Series 069, School of Economics, University of East Anglia, Norwich, UK..
    19. Dongryul Lee & Joon Song, 2019. "Optimal Team Contests to Induce More Efforts," Journal of Sports Economics, , vol. 20(3), pages 448-476, April.
    20. An, Yonghong & Hu, Yingyao & Liu, Pengfei, 2018. "Estimating heterogeneous contributing strategies in threshold public goods provision: A structural analysis," Journal of Economic Behavior & Organization, Elsevier, vol. 152(C), pages 124-146.

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