Individual Responsibility and the Funding of Collective Goods
When a deficit occurs in the funding of collective goods, it is usually covered by raising the amount of taxes or by rationing the supply of the goods. This article compares the efficiency of these institutions. We report the results of a 2x2 experiment based on a game in the first stage of which subjects can voluntarily contribute to the funding of a collective good that is being used to compensate the victims of a disaster. In the second stage of the game, in case of a deficit, we introduce either taxation or rationing. Each treatment is subjected to two conditions: the burden of the deficit is either uniform for all the subjects, or individualized according to the first-stage contribution. We show that the individualized treatments favor the provision of the collective good through voluntary cooperation whereas the uniform treatments encourage free-riding. Individualized taxation brings the voluntary contributions closer to the optimum while uniform rationing appears to be the worst system since free-riding restrains the provision of the good.
|Date of creation:||Sep 2007|
|Publication status:||Published in Working paper GATE 2007-18. 2007|
|Note:||View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00174557|
|Contact details of provider:|| Web page: https://hal.archives-ouvertes.fr/|
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.:
- Dawes, Robyn M & Thaler, Richard H, 1988. "Anomalies: Cooperation," Journal of Economic Perspectives, American Economic Association, vol. 2(3), pages 187-197, Summer.
- Tatsuyoshi Saijo & Hideki Nakamura, 2001. "The 'Spite' Dilemma in Voluntary Contribution Mechanism Experiments," Levine's Working Paper Archive 563824000000000155, David K. Levine.
- Goeree, Jacob K. & Holt, Charles A. & Laury, Susan K., 2002. "Private costs and public benefits: unraveling the effects of altruism and noisy behavior," Journal of Public Economics, Elsevier, vol. 83(2), pages 255-276, February.
- Kenneth Chan & Stuart Mestelman & Robert Moir & R. Muller, 1999.
"Heterogeneity and the Voluntary Provision of Public Goods,"
Springer;Economic Science Association, vol. 2(1), pages 5-30, August.
- Kenneth S. Chan & Stuart Mestelman & Rob Moir & R. Andrew Muller, 1998. "Heterogeneity and the Voluntary Provision of Public Goods," Department of Economics Working Papers 1998-04, McMaster University.
- Sefton, Martin & Steinberg, Richard, 1996. "Reward structures in public good experiments," Journal of Public Economics, Elsevier, vol. 61(2), pages 263-287, August.
- Marc WILLINGER & Anthony ZIEGELMEYER, 1999.
"Framing and cooperation in public good games: an experiment with an interior solution,"
Working Papers of BETA
9901, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
- Willinger, Marc & Ziegelmeyer, Anthony, 1999. "Framing and cooperation in public good games: an experiment with an interior solution," Economics Letters, Elsevier, vol. 65(3), pages 323-328, December.
- Chan, Kenneth S. & Mestelman, Stuart & Muller, R. Andrew, 2008.
"Voluntary Provision of Public Goods,"
Handbook of Experimental Economics Results,
- Kenneth S. Chan & Stuart Mestelman & R. Andrew Muller, 1998. "Voluntary Provision of Public Goods," McMaster Experimental Economics Laboratory Publications 1998-02, McMaster University.
- 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.
- Andreoni, J., 1990.
"An Experimental Test Of The Public Goods Crowding-Out Hypothesis,"
9006, Wisconsin Madison - Social Systems.
- Andreoni, James, 1993. "An Experimental Test of the Public-Goods Crowding-Out Hypothesis," American Economic Review, American Economic Association, vol. 83(5), pages 1317-1327, December.
- Keser, Claudia, 1996. "Voluntary contributions to a public good when partial contribution is a dominant strategy," Economics Letters, Elsevier, vol. 50(3), pages 359-366, March.
- Kirchsteiger, Georg & Puppe, Clemens, 1997.
"On the possibility of efficient private provision of public goods through government subsidies,"
Journal of Public Economics,
Elsevier, vol. 66(3), pages 489-504, December.
- Georg Kirchsteiger & Clemens Puppe, 1997. "On the possibility of efficient private provision of public goods through government subsidies," ULB Institutional Repository 2013/5913, ULB -- Universite Libre de Bruxelles.
- Georg KIRCHSTEIGER & Clemens PUPPE, 1996. "On the Possibility of Efficient Private Provision of Public Goods through Government Subsidies," Vienna Economics Papers vie9608, University of Vienna, Department of Economics.
- Roberto Burlando & Francesco Guala, 2005. "Heterogeneous Agents in Public Goods Experiments," Experimental Economics, Springer;Economic Science Association, vol. 8(1), pages 35-54, April.
- Roberts, Russell D, 1987. "Financing Public Goods," Journal of Political Economy, University of Chicago Press, vol. 95(2), pages 420-437, April.
When requesting a correction, please mention this item's handle: RePEc:hal:cesptp:halshs-00174557. 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: (CCSD)
If references are entirely missing, you can add them using this form.