IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

Pre-negotiation commitment and internalization in public good provision through bilateral negotiations

Listed author(s):
  • Noriaki Matsushima
  • Ryusuke Shinohara

We investigate public good provision through bilateral negotiations between a public-good supplier and the beneficiaries of the good. We find that although a pre-negotiation commitment on the production level of the public good by the supplier enhances the internalization of beneficiaries' preferences, the good is not necessarily provided efficiently. We show that with the commitment, the supplier produces the public good at an efficient level in equilibrium if and only if its bargaining power is sufficiently weak. In addition, the public good may be produced excessively as a result of the commitment when the supplier's bargaining power is sufficiently strong.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.iser.osaka-u.ac.jp/library/dp/2015/DP0948R.pdf
Download Restriction: no

Paper provided by Institute of Social and Economic Research, Osaka University in its series ISER Discussion Paper with number 0948r.

as
in new window

Length:
Date of creation: Sep 2015
Date of revision: Aug 2017
Handle: RePEc:dpr:wpaper:0948r
Contact details of provider: Postal:
6-1 Mihogaoka, Ibaraki, Osaka 567-0047

Fax: 81-6-6879-8583
Web page: http://www.iser.osaka-u.ac.jp/index-e.html
Email:


More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as
in new window


  1. Huber, Claus & Wirl, Franz, 1998. "The Polluter Pays versus the Pollutee Pays Principle under Asymmetric Information," Journal of Environmental Economics and Management, Elsevier, vol. 35(1), pages 69-87, January.
  2. Thoron, Sylvie & Sol, Emmanuel & Willinger, Marc, 2009. "Do binding agreements solve the social dilemma?," Journal of Public Economics, Elsevier, vol. 93(11-12), pages 1271-1282, December.
  3. Hoffmann, Sönke & Mihm, Benedikt & Weimann, Joachim, 2015. "To commit or not to commit? An experimental investigation of pre-commitments in bargaining situations with asymmetric information," Journal of Public Economics, Elsevier, vol. 121(C), pages 95-105.
  4. Christophe Depres & Gilles Grolleau & Naoufel Mzoughi, 2008. "Contracting for Environmental Property Rights: The Case of Vittel," Economica, London School of Economics and Political Science, vol. 75(299), pages 412-434, 08.
  5. Ken Binmore & Ariel Rubinstein & Asher Wolinsky, 1986. "The Nash Bargaining Solution in Economic Modelling," RAND Journal of Economics, The RAND Corporation, vol. 17(2), pages 176-188, Summer.
  6. Muthoo,Abhinay, 1999. "Bargaining Theory with Applications," Cambridge Books, Cambridge University Press, number 9780521576475, October.
  7. Konishi, Hideo & Furusawa, Taiji, 2011. "Contributing or free-riding? Voluntary participation in a public good economy," Theoretical Economics, Econometric Society, vol. 6(2), May.
  8. Debraj Ray & Rajiv Vohra, 2001. "Coalitional Power and Public Goods," Journal of Political Economy, University of Chicago Press, vol. 109(6), pages 1355-1384, December.
  9. Laussel, Didier & Le Breton, Michel, 2001. "Conflict and Cooperation: The Structure of Equilibrium Payoffs in Common Agency," Journal of Economic Theory, Elsevier, vol. 100(1), pages 93-128, September.
  10. Porter, Richard C., 1988. "Environmental negotiation: Its potential and its economic efficiency," Journal of Environmental Economics and Management, Elsevier, vol. 15(2), pages 129-142, June.
  11. B. Douglas Bernheim & Michael D. Whinston, 1986. "Menu Auctions, Resource Allocation, and Economic Influence," The Quarterly Journal of Economics, Oxford University Press, vol. 101(1), pages 1-31.
  12. Milliou, Chrysovalantou & Petrakis, Emmanuel, 2007. "Upstream horizontal mergers, vertical contracts, and bargaining," International Journal of Industrial Organization, Elsevier, vol. 25(5), pages 963-987, October.
  13. 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.
  14. Henrick Horn & Asher Wolinsky, 1988. "Bilateral Monopolies and Incentives for Merger," RAND Journal of Economics, The RAND Corporation, vol. 19(3), pages 408-419, Autumn.
  15. Dixit, Avinash & Olson, Mancur, 2000. "Does voluntary participation undermine the Coase Theorem?," Journal of Public Economics, Elsevier, vol. 76(3), pages 309-335, June.
  16. Alex Robson & Stergios Skaperdas, 2008. "Costly enforcement of property rights and the Coase theorem," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 36(1), pages 109-128, July.
  17. MacKenzie, Ian A. & Ohndorf, Markus, 2013. "Restricted Coasean bargaining," Journal of Public Economics, Elsevier, vol. 97(C), pages 296-307.
  18. Tore Ellingsen & Elena Paltseva, 2016. "Confining the Coase Theorem: Contracting, Ownership, and Free-Riding," Review of Economic Studies, Oxford University Press, vol. 83(2), pages 547-586.
  19. David McEvoy, 2010. "Not it: opting out of voluntary coalitions that provide a public good," Public Choice, Springer, vol. 142(1), pages 9-23, January.
  20. Matsushima, Noriaki & Shinohara, Ryusuke, 2014. "What factors determine the number of trading partners?," Journal of Economic Behavior & Organization, Elsevier, vol. 106(C), pages 428-441.
  21. Saijo, Tatsuyoshi & Yamato, Takehiko, 1999. "A Voluntary Participation Game with a Non-excludable Public Good," Journal of Economic Theory, Elsevier, vol. 84(2), pages 227-242, February.
  22. Hideo Konishi & Ryusuke Shinohara, 2014. "Voluntary Participation and Provision of Public Goods in Large Finite Economies," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 16(2), pages 173-195, 04.
  23. Valencia-Toledo, Alfredo & Vidal-Puga, Juan, 2017. "A sequential bargaining protocol for land rental arrangements," MPRA Paper 80424, University Library of Munich, Germany.
  24. Kai A. Konrad & Marcel Thum, 2014. "Climate Policy Negotiations with Incomplete Information," Economica, London School of Economics and Political Science, vol. 81(322), pages 244-256, 04.
  25. Alexander Raskovich, 2003. "Pivotal Buyers and Bargaining Position," Journal of Industrial Economics, Wiley Blackwell, vol. 51(4), pages 405-426, December.
  26. Ellingsen, Tore & Paltseva, Elena, 2012. "The private provision of excludable public goods: An inefficiency result," Journal of Public Economics, Elsevier, vol. 96(9-10), pages 658-669.
  27. MacKenzie, Ian A. & Ohndorf, Markus, 2016. "Coasean bargaining in the presence of Pigouvian taxation," Journal of Environmental Economics and Management, Elsevier, vol. 75(C), pages 1-11.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:dpr:wpaper:0948r. 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: (Fumiko Matsumoto)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.