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A Note on Payoff Equivalence of the Volunteer's Dilemma and the Stag Hunt Game and Inferiority of Intermediate Thresholds

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  • Friedel Bolle

    (Department of Economics, Europa-Universität Viadrina, Grosse Scharrnstrasse 59, 15230 Frankfurt, Germany)

Abstract

The launch of a public project requires "enough" support from a group of 'n' players, i.e., a certain threshold has to be passed. The players may be differently important for passing the threshold; they may have different costs of support and different benefits if the project is launched. If players have only binary decision sets (participate or not, vote approvingly or not) this game is called a Binary Threshold Public Goods game (BTPG). We compare the expected equilibrium payoffs in BTPGs with the same costs and benefits but different thresholds. Applying two principles of equilibrium selection, the least and the most demanding threshold, namely "one supporting player is sufficient" (Volunteer's Dilemma) and "support by all players is necessary" (Stag Hunt game) are payoff equivalent for all players. Compared with the Stag Hunt game, all intermediate thresholds are connected with Pareto-inferior payoffs.

Suggested Citation

  • Friedel Bolle, 2015. "A Note on Payoff Equivalence of the Volunteer's Dilemma and the Stag Hunt Game and Inferiority of Intermediate Thresholds," International Game Theory Review (IGTR), World Scientific Publishing Co. Pte. Ltd., vol. 17(03), pages 1-6.
    • Handle: RePEc:wsi:igtrxx:v:17:y:2015:i:03:n:s0219198915500048
    DOI: 10.1142/S0219198915500048
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    References listed on IDEAS

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    1. Carlsson, H. & van Damme, E.E.C., 1991. "Equilibrium selection in stag hunt games," Other publications TiSEM bd92d0ae-790f-40ad-afea-4, Tilburg University, School of Economics and Management.
    2. Friedel Bolle, 2014. "Binary Threshold Public Goods," Discussion Paper Series RECAP15 14, RECAP15, European University Viadrina, Frankfurt (Oder).
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    More about this item

    Keywords

    Threshold public goods; binary decisions; mixed strategy equilibria; H41; D71;
    All these keywords.

    JEL classification:

    • B4 - Schools of Economic Thought and Methodology - - Economic Methodology
    • C0 - Mathematical and Quantitative Methods - - General
    • C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling
    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • D5 - Microeconomics - - General Equilibrium and Disequilibrium
    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • M2 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics

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