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Volunteer work and club size: Nash equilibrium and optimality

  • BARHAM, Vicky

    (CORE, Université catholique de Louvain, B-1348 Louvain-la-Neuve, Belgium)

  • BOADWAY, Robin

    (Queen’s University)

  • MARCHAND, Maurice

    (CORE, Université catholique de Louvain, B-1348 Louvain-la-Neuve, Belgium)

  • PESTIEAU, Pierre

    (CORE, Université catholique de Louvain, B-1348 Louvain-la-Neuve, and Université de Liège, B-4000 Liège, Belgium)

The non-cooperative provision of public goods is analysed in the context of a two-stage game in which club size is determined endogenously. Equilibrium club size and voluntary labour supply are shown to be inefficient. The impact of optimally-chosen fiscal policies using simple instruments is studied. When agents do not derive nonpecuniary benefits from volunteer work, lump-sum grants can be used to implement the first-best equal treatment allocation but private provision is fully crowded out. Otherwise, it is found that simple fiscal instruments cannot implement the first-best equal-treatment allocation unless club size is directly regulated.

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Paper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 1992040.

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Date of creation: 01 Jun 1992
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Handle: RePEc:cor:louvco:1992040
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  1. Bernheim, B Douglas, 1986. "On the Voluntary and Involuntary Provision of Public Goods," American Economic Review, American Economic Association, vol. 76(4), pages 789-93, September.
  2. Andreoni, James, 1988. "Privately provided public goods in a large economy: The limits of altruism," Journal of Public Economics, Elsevier, vol. 35(1), pages 57-73, February.
  3. Warr, Peter G., 1982. "Pareto optimal redistribution and private charity," Journal of Public Economics, Elsevier, vol. 19(1), pages 131-138, October.
  4. Bengt Holmstrom, 1982. "Moral Hazard in Teams," Bell Journal of Economics, The RAND Corporation, vol. 13(2), pages 324-340, Autumn.
  5. Bergstrom, Theodore & Blume, Lawrence & Varian, Hal, 1986. "On the private provision of public goods," Journal of Public Economics, Elsevier, vol. 29(1), pages 25-49, February.
  6. Robin Boadway & Pierre Pestieau & David Wildasin, 1987. "Tax-Transfer Policies and the Voluntary Provision of Public Goods," Working Papers 682, Queen's University, Department of Economics.
  7. Bernheim, B Douglas & Bagwell, Kyle, 1988. "Is Everything Neutral?," Journal of Political Economy, University of Chicago Press, vol. 96(2), pages 308-38, April.
  8. Andreoni, James, 1989. "Giving with Impure Altruism: Applications to Charity and Ricardian Equivalence," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1447-58, December.
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