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Contributing or Free-Riding? Voluntary Participation in a Public Good Economy

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  • FURUSAWA Taiji
  • KONISHI Hideo

Abstract

We consider a (pure) public goods provision problem with voluntary participation in a quasi-linear economy. We propose a new hybrid solution concept, the free-riding-proof core (FRP-Core), which endogenously determines a contribution group, public goods provision level, and how to share the provision costs. The FRP-Core is always nonempty in public goods economies but does not usually achieve global efficiency. The FRP-Core has support from both cooperative and noncooperative games. In particular, it is equivalent to the set of perfectly coalition-proof Nash equilibria (Bernheim, Peleg, and Whinston, 1987) of a dynamic game with players' participation decisions followed by a common agency game of public goods provision.

Suggested Citation

  • FURUSAWA Taiji & KONISHI Hideo, 2011. "Contributing or Free-Riding? Voluntary Participation in a Public Good Economy," Discussion papers 11028, Research Institute of Economy, Trade and Industry (RIETI).
  • Handle: RePEc:eti:dpaper:11028
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    References listed on IDEAS

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    Cited by:

    1. Zudenkova, Galina, 2010. "Sincere Lobby Formation," MPRA Paper 28249, University Library of Munich, Germany.
    2. Hideo Konishi & Ryusuke Shinohara, 2011. "Voluntary Participation and the Provision of Public Goods in Large Finite Economies," Boston College Working Papers in Economics 776, Boston College Department of Economics.
    3. Bag, Parimal Kanti & Mondal, Debasis, 2014. "Group size paradox and public goods," Economics Letters, Elsevier, vol. 125(2), pages 215-218.
    4. 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, April.
    5. FURUSAWA Taiji & KONISHI Hideo, 2011. "Free-Riding-Proof International Environmental Agreements," Discussion papers 11043, Research Institute of Economy, Trade and Industry (RIETI).
    6. Noriaki Matsushima & Ryusuke Shinohara, 2015. "The efficiency of monopolistic provision of public goods through simultaneous bilateral bargaining," ISER Discussion Paper 0948, Institute of Social and Economic Research, Osaka University.
    7. Ryusuke Shinohara, 2010. "Coalition-proof equilibria in a voluntary participation game," International Journal of Game Theory, Springer;Game Theory Society, vol. 39(4), pages 603-615, October.
    8. Ryusuke Shinohara, 2014. "Participation and demand levels for a joint project," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 43(4), pages 925-952, December.
    9. Federico Quartieri, 2013. "Coalition-proofness under weak and strong Pareto dominance," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 40(2), pages 553-579, February.
    10. Federico Quartieri & Ryusuke Shinohara, 2015. "Coalition-proofness in a class of games with strategic substitutes," International Journal of Game Theory, Springer;Game Theory Society, vol. 44(4), pages 785-813, November.
    11. Zudenkova, Galina, 2012. "Lobbying as a Guard against Extremism," Working Papers 2072/184036, Universitat Rovira i Virgili, Department of Economics.
    12. Se-il Mun, 2016. "Joint Provision of International Transport Infrastructure," Discussion papers e-15-015, Graduate School of Economics , Kyoto University.
    13. Noriaki Matsushima & Ryusuke Shinohara, 2015. "Pre-negotiation commitment and internalization in public good provision through bilateral negotiations," ISER Discussion Paper 0948r, Institute of Social and Economic Research, Osaka University, revised Aug 2017.
    14. Zudenkova Galina, 2017. "Lobbying as a Guard against Extremism," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 17(1), pages 1-17, February.
    15. Noriaki Matsushima & Ryusuke Shinohara, 2012. "Private Provision of Public Goods that are Complements for Private Goods: Application to Open Source Software Developments," ISER Discussion Paper 0830, Institute of Social and Economic Research, Osaka University.
    16. Yukihiro Nishimura & Ryusuke Shinohara, 2013. "A voluntary participation game through a unit-by-unit cost share mechanism of a non-excludable public good," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 40(3), pages 793-814, March.

    More about this item

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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