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Sequential Provision Of Public Goods

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  • VARIAN, H.R.

Abstract

I consider the private provision of public goods in two stage games. If the agent who likes the public good least contributes first, the amount of the public good supplied will be the same as in the Nash equilibrium. If the agent who likes the public good most contributes first, less of the public good may be supplied. Similar results hold if the first mover is uncertain of the tastes of the other agent. If the agents bid for the right to move first, the agent who values the public good least will win. If each agent chooses the rate at which he will subsidize the other agent's contributions, the subsidies that support the Lindahl allocation are the unique equilibrium outcome. I also describe two related subsidy-setting games that yield Lindahl allocations in $n$-person games with general utility functions.}
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Varian, H.R., 1989. "Sequential Provision Of Public Goods," Papers 89-17, Michigan - Center for Research on Economic & Social Theory.
  • Handle: RePEc:fth:michet:89-17
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    References listed on IDEAS

    as
    1. Groves, Theodore & Ledyard, John O, 1977. "Optimal Allocation of Public Goods: A Solution to the "Free Rider" Problem," Econometrica, Econometric Society, vol. 45(4), pages 783-809, May.
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    3. L. Hurwicz, 1979. "Outcome Functions Yielding Walrasian and Lindahl Allocations at Nash Equilibrium Points," Review of Economic Studies, Oxford University Press, vol. 46(2), pages 217-225.
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    5. Danziger, Leif & Schnytzer, Adi, 1991. "Implementing the Lindahl voluntary-exchange mechanism," European Journal of Political Economy, Elsevier, vol. 7(1), pages 55-64, April.
    6. Theodore Groves, 1979. "Efficient Collective Choice when Compensation is Possible," Review of Economic Studies, Oxford University Press, vol. 46(2), pages 227-241.
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    8. 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.
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    Citations

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    Cited by:

    1. Gregor, Martin, 2015. "Task divisions in teams with complementary tasks," Journal of Economic Behavior & Organization, Elsevier, vol. 117(C), pages 102-120.
    2. Daniel Goulao, 2005. "Review of Privade Provided Public Goods Literature," Public Economics 0501006, University Library of Munich, Germany.
    3. Emrah Arbak & Marie Claire Villeval, 2006. "Endogenous Leadership - Selection and Influence," Post-Print halshs-00175561, HAL.
    4. Eduardo Ley, 1996. "On the private provision of public goods: a diagrammatic exposition," Investigaciones Economicas, Fundación SEPI, vol. 20(1), pages 105-123, January.
    5. Matthew O. Jackson & Simon Wilkie, 2005. "Endogenous Games and Mechanisms: Side Payments Among Players," Review of Economic Studies, Oxford University Press, vol. 72(2), pages 543-566.
    6. David Masclet & Marc Willinger & Charles Figuières, 2007. "The economics of the telethon: leadership, reciprocity and moral motivation," Working Papers 07-08, LAMETA, Universitiy of Montpellier, revised Oct 2007.
    7. Andreoni, James & Brown, Paul M. & Vesterlund, Lise, 2002. "What Makes an Allocation Fair? Some Experimental Evidence," Games and Economic Behavior, Elsevier, vol. 40(1), pages 1-24, July.
    8. Vesterlund, Lise, 2003. "The informational value of sequential fundraising," Journal of Public Economics, Elsevier, vol. 87(3-4), pages 627-657, March.
    9. Lata Gangadharan & Nikos Nikiforakis & Marie Claire Villeval, 2015. "Equality concerns and the limits of self-governance in heterogeneous populations," Working Papers 1525, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.
    10. repec:pit:wpaper:266 is not listed on IDEAS
    11. Geoffrey G. Parker & Marshall W. Van Alstyne, 2005. "Two-Sided Network Effects: A Theory of Information Product Design," Management Science, INFORMS, vol. 51(10), pages 1494-1504, October.
    12. Emrah Arbak & Marie Claire Villeval, 2013. "Voluntary Leadership: Selection and Influence," Post-Print halshs-00664830, HAL.
    13. Bilodeau, Marc & Slivinski, Al, 1997. "Rival charities," Journal of Public Economics, Elsevier, vol. 66(3), pages 449-467, December.
    14. Ledyard, John O., "undated". "Public Goods: A Survey of Experimental Research," Working Papers 861, California Institute of Technology, Division of the Humanities and Social Sciences.
    15. Cagri S. Kumru & Lise Vesterlund, 2010. "The Effect of Status on Charitable Giving," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 12(4), pages 709-735, August.
    16. repec:spr:grdene:v:23:y:2014:i:5:d:10.1007_s10726-013-9370-6 is not listed on IDEAS
    17. Leslie M. Marx & Steven A. Matthews, 2000. "Dynamic Voluntary Contribution to a Public Project," Review of Economic Studies, Oxford University Press, vol. 67(2), pages 327-358.
    18. Damianov, Damian S. & Peeters, Ronald, 2017. "On the disclosure of ticket sales in charitable lotteries," Economics Letters, Elsevier, vol. 150(C), pages 73-76.
    19. repec:eee:eecrev:v:100:y:2017:i:c:p:143-156 is not listed on IDEAS
    20. Potters, J.J.M. & Sefton, M. & Vesterlund, L., 2001. "Why Announce Leadership Contributions? An Experimental Study of the Signaling and Reciprocity Hypotheses," Discussion Paper 2001-100, Tilburg University, Center for Economic Research.
    21. Emrah Arbak & Marie-Claire Villeval, 2013. "Voluntary leadership: motivation and influence," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 40(3), pages 635-662, March.
    22. Gangadharan, Lata & Nikiforakis, Nikos & Villeval, Marie Claire, 2017. "Normative conflict and the limits of self-governance in heterogeneous populations," European Economic Review, Elsevier, vol. 100(C), pages 143-156.
    23. Coats, Jennifer C. & Gronberg, Timothy J. & Grosskopf, Brit, 2009. "Simultaneous versus sequential public good provision and the role of refunds -- An experimental study," Journal of Public Economics, Elsevier, vol. 93(1-2), pages 326-335, February.

    More about this item

    Keywords

    public goods ; game theory ; economic equilibrium;

    JEL classification:

    • D6 - Microeconomics - - Welfare Economics
    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • H - Public Economics

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