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Leadership in Public Good Provision: a Timing Game Perspective

Author

Listed:
  • Grégoire Rota-Graziosi

    (CERDI - Centre d'Études et de Recherches sur le Développement International - UdA - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique)

  • Hubert Kempf

    () (PSE - Paris School of Economics)

Abstract

We address in this paper the issue of leadership when two governments provide public goods to their constituencies with cross border externalities as both public goods are valued by consumers in both countries. We study a timing game between two different countries: before providing public goods, the two policymakers non-cooperatively decide their preferred sequence of moves. We establish conditions under which a first- or second-mover advantage emerges for each country, highlighting the role of spillovers and the strategic complementarity or substitutability of public goods. As a result we are able to prove that there is no leader when, for both countries, public goods are substitutable. When public goods are complements for both countries, both countries may emerge as the leader in the game. Hence a coordination issue arises. We use the notion of risk-dominance to select the leading government. Lastly, in the mixed case, the government for whom public goods are substitutable becomes the leader.

Suggested Citation

  • Grégoire Rota-Graziosi & Hubert Kempf, 2011. "Leadership in Public Good Provision: a Timing Game Perspective," Working Papers halshs-00556944, HAL.
  • Handle: RePEc:hal:wpaper:halshs-00556944
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00556944
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    References listed on IDEAS

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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. Keisuke Hattori & Takahiro Kitamura, 2013. "Endogenous Timing in Strategic Environmental Policymaking," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 55(2), pages 199-215, June.
    3. Hoffmann, Magnus & Rota-Graziosi, Grégoire, 2012. "Endogenous timing in general rent-seeking and conflict models," Games and Economic Behavior, Elsevier, vol. 75(1), pages 168-184.
    4. Sengupta, Bodhisatva, 2016. "Endogenous Leadership in a Federal Transfer Game," Working Papers 16/180, National Institute of Public Finance and Policy.
    5. Hubert Kempf & Grégoire Rota Graziosi, 2010. "Leadership in Public Good Provision: A Timing Game Perspective," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 12(4), pages 763-787, August.
    6. Kempf, Hubert & Rota-Graziosi, Grégoire, 2010. "Endogenizing leadership in tax competition," Journal of Public Economics, Elsevier, vol. 94(9-10), pages 768-776, October.
    7. Hubert Kempf & Grégoire Rota-Graziosi, 2015. "Further analysis on leadership in tax competition: the role of capital ownership—a comment," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 22(6), pages 1028-1039, December.
    8. Grégoire ROTA-GRAZIOSI & Hubert KEMPF, 2009. "Leading and losing the tax competition race," Working Papers 200921, CERDI.
    9. Hattori, Keisuke & Yamada, Mai, 2013. "Skill Diversity and Leadership in Team Production," MPRA Paper 48481, University Library of Munich, Germany.
    10. repec:kap:enreec:v:67:y:2017:i:3:d:10.1007_s10640-016-9997-2 is not listed on IDEAS

    More about this item

    Keywords

    public good; Spillovers; Subgame Perfect Equilibrium; Strategic Complements; Stackelberg; Pareto Dominance; Risk Dominance;

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy

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