Subsidization to induce tipping
In binary choice games with strategic complementarities and multiple equilibria, we characterize the minimal cost subsidy program to guarantee agents play the Pareto optimal equilibrium. These subsidies are generally asymmetric, whether or not agents are identical and even if private values are anonymous.
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References listed on IDEAS
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- Geoffrey Heal & Howard Kunreuther, 2010.
"Social Reinforcement: Cascades, Entrapment, and Tipping,"
American Economic Journal: Microeconomics,
American Economic Association, vol. 2(1), pages 86-99, February.
- Geoffrey Heal & Howard Kunreuther, 2007. "Social Reinforcement: Cascades, Entrapment and Tipping," NBER Working Papers 13579, National Bureau of Economic Research, Inc.
- Costas Azariadis, 1996.
"The Economics of Poverty Traps Part One: Complete Markets,"
9606, Centro de Investigacion Economica, ITAM.
- Azariadis, Costas, 1996. "The Economics of Poverty Traps: Part One: Complete Markets," Journal of Economic Growth, Springer, vol. 1(4), pages 449-96, December.
- Kunreuther, Howard & Heal, Geoffrey, 2003. "Interdependent Security," Journal of Risk and Uncertainty, Springer, vol. 26(2-3), pages 231-49, March-May.
- Richard Cornes, 1993. "Dyke Maintenance and Other Stories: Some Neglected Types of Public Goods," The Quarterly Journal of Economics, Oxford University Press, vol. 108(1), pages 259-271.
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