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Threshold levels and the realization of a group benefit

Author

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  • Xiaopeng Xu

    (University of California-Berkeley)

Abstract

This paper considers a voluntary contribution threshold game in which a group benefit is realized only if the number of contributors at least reaches a threshold level, and analyzes the effect of the threshold level on the likelihood that the group benefit is realized. Changes in the threshold level in interior symmetric equilibrium have two effects on the likelihood, the direct, threshold effect and the indirect, strategic effect. While the direct effect is always negative, the indirect effect can be either positive or negative. And the net effect is not necessarily negative.

Suggested Citation

  • Xiaopeng Xu, 2002. "Threshold levels and the realization of a group benefit," Economics Bulletin, AccessEcon, vol. 3(16), pages 1-8.
    • Handle: RePEc:ebl:ecbull:eb-02c70010
    as

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    References listed on IDEAS

    as
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    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • H4 - Public Economics - - Publicly Provided Goods

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