Contests and the Private Production of Public Goods
The private provision of public goods generally suffers from two types of efficiency failures: sorting problems (the wrong individuals contribute) and quantity problems (an inefficient amount is provided). Embedding the provision game into a contest that rewards larger contributions with higher probabilities of winning a prize may remedy such failures. Applications include tenure decisions at universities, electoral competition among politicians, etc. We identify a tradeoff between the value of the prize and the decisiveness of the contest. High-powered incentives in contests may cause an overprovision of the public good or wasteful participation of unproductive individuals in the contest.
Volume (Year): 79 (2012)
Issue (Month): 1 (July)
|Contact details of provider:|| Web page: http://www.southerneconomic.org/|
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:sej:ancoec:v:79:1:y:2012:p:161-179. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Laura Razzolini)
If references are entirely missing, you can add them using this form.