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Stackelberg leadership and transfers in private provision of public goods

Author

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  • (*), Kai A. Konrad

    (Department of Economics, Freie UniversitÄt Berlin, Boltzmannstrasse 20, D-14195 Berlin, Germany)

  • Wolfgang Buchholz

    (Department of Economics, UniversitÄt Regensburg, D-93040 Regensburg, Germany)

  • Kjell Erik Lommerud

    (Department of Economics, Universitetet i Bergen, Fosswinckels gate 6, N-5007 Bergen, Norway)

Abstract

We consider transfers in a Stackelberg game of private provision of a public good. It turns out that the agent who is the follower in the process of making voluntary contributions to a public good may have an incentive to make monetary transfers to the Stackelberg leader even in a situation where neither has a comparative advantage in making contributions to the public good. The Stackelberg leader is willing to accept such transfers if the actual contribution game is fully non-cooperative because the transfer generates a Pareto superior outcome. If the contributions in the Stackelberg equilibrium is the threat point of a possible cooperative Nash bargaining game, the Stackelberg leader will refuse to accept the transfer if she can.

Suggested Citation

  • (*), Kai A. Konrad & Wolfgang Buchholz & Kjell Erik Lommerud, 1997. "Stackelberg leadership and transfers in private provision of public goods," Review of Economic Design, Springer;Society for Economic Design, vol. 3(1), pages 29-43.
  • Handle: RePEc:spr:reecde:v:3:y:1997:i:1:p:29-43 Note: Received: 30 June 1995 / Accepted: 18 February 1997
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    Cited by:

    1. Vicary, Simon & Sandler, Todd, 2002. "Weakest-link public goods: Giving in-kind or transferring money," European Economic Review, Elsevier, vol. 46(8), pages 1501-1520, September.
    2. Matthew O. Jackson & Simon Wilkie, 2005. "Endogenous Games and Mechanisms: Side Payments Among Players," Review of Economic Studies, Oxford University Press, pages 543-566.
    3. Andreas Löschel & Dirk Rübbelke, 2014. "On the Voluntary Provision of International Public Goods," Economica, London School of Economics and Political Science, vol. 81(322), pages 195-204, April.
    4. Rudolf Kerschbamer & Clemens Puppe, 1998. "Voluntary contributions when the public good is not necessarily normal," Journal of Economics, Springer, pages 175-192.
    5. Clemens Puppe & Rudolf Kerschbamer, 2001. "Sequential contributions to public goods: on the structure of the equilibrium set," Economics Bulletin, AccessEcon, vol. 8(3), pages 1-7.
    6. Russo, Giuseppe & Senatore, Luigi, 2012. "A note on contribution games with loss functions," Economics Letters, Elsevier, vol. 115(2), pages 211-214.
    7. Miriam Beblo & Julio Robledo, 2008. "The wage gap and the leisure gap for double-earner couples," Journal of Population Economics, Springer;European Society for Population Economics, pages 281-304.
    8. Andaluz, Joaquín & Marcén, Miriam & Molina, José Alberto, 2008. "Dynamics of Intrahousehold Bargaining," IZA Discussion Papers 3757, Institute for the Study of Labor (IZA).
    9. Joachim Weimann, 2010. "Politikberatung und die Verhaltensökonomie: Eine Fallstudie zu einem schwierigen Verhältnis," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 130(3), pages 279-296.
    10. Kessing, Sebastian Georg, 2003. "Delay in joint projects
      [Verzögerung bei gemeinsamen Projekten]
      ," Discussion Papers, Research Unit: Market Processes and Governance SP II 2003-15, Social Science Research Center Berlin (WZB).
    11. Miriam Beblo & Julio Robledo, 2008. "The wage gap and the leisure gap for double-earner couples," Journal of Population Economics, Springer;European Society for Population Economics, pages 281-304.

    More about this item

    Keywords

    Voluntary provision of public goods; Stackelberg games;

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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