Free Riders Do not Like Uncertainty
We examine the effect of introducing Knightian uncertainty into a simple model of public good provision. We find that uncertainty may reduce the free-rider problem if utility is concave in public goods or there are decreasing returns to scale in the production of public goods. It is possible that free-riding may be less in a large society. We argue that our results are compatible with the experimental evidence.
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|Date of creation:||1996|
|Contact details of provider:|| Postal: Edgbaston, Birmingham, B15 2TT|
Web page: http://www.economics.bham.ac.uk
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