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Heterogeneity, Coordination and the Provision of Best-Shot Public Goods

  • Todd Cherry

    ()

  • Stephen Cotten
  • Stephan Kroll

In a best-shot public good, where the provision level is determined by the highest contribution instead of the sum of all contributions, there is potential for waste and underprovision due to coordination failure. These failures are exacerbated when agents are identical because there is no focal point to guide coordination. In most real-world best-shot public-good situations, however, heterogeneity exists in the ability to contribute and the benefits received from the good. With such differences, shared expectations might emerge to improve coordination and increase efficiency. Using laboratory experiments, we find significant behavioral responses to heterogeneity that improve efficiency, but not always from increased coordination. Copyright Economic Science Association 2013

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File URL: http://hdl.handle.net/10.1007/s10683-012-9349-1
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Article provided by Springer in its journal Experimental Economics.

Volume (Year): 16 (2013)
Issue (Month): 4 (December)
Pages: 497-510

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Handle: RePEc:kap:expeco:v:16:y:2013:i:4:p:497-510
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  1. Todd Sandler, 2006. "Regional public goods and international organizations," The Review of International Organizations, Springer, vol. 1(1), pages 5-25, March.
  2. Vincent P. Crawford & Uri Gneezy & Yuval Rottenstreich, 2008. "The Power of Focal Points Is Limited: Even Minute Payoff Asymmetry May Yield Large Coordination Failures," American Economic Review, American Economic Association, vol. 98(4), pages 1443-58, September.
  3. Roman Sheremeta, 2010. "Perfect-Substitutes, Best-Shot, and Weakest-Link Contests between Groups," Working Papers 10-25, Chapman University, Economic Science Institute.
  4. Van Huyck, John B & Battalio, Raymond C & Beil, Richard O, 1990. "Tacit Coordination Games, Strategic Uncertainty, and Coordination Failure," American Economic Review, American Economic Association, vol. 80(1), pages 234-48, March.
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  6. Mehta, Judith & Starmer, Chris & Sugden, Robert, 1994. "The Nature of Salience: An Experimental Investigation of Pure Coordination Games," American Economic Review, American Economic Association, vol. 84(3), pages 658-73, June.
  7. Glen W. Harrison & Jack Hirshleifer, 1998. "An experimental evaluation of weakest link/best shot models of public goods," Levine's Working Paper Archive 299, David K. Levine.
  8. Todd R. Kaplan & Bradley J. Ruffle, 2012. "Which Way to Cooperate," Economic Journal, Royal Economic Society, vol. 122(563), pages 1042-1068, 09.
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