The Second-Order Dilemma of Public Goods and Capital Accumulation
The second-order dilemma of public goods arises from individuals' incentive to free ride on a mechanism to solve the provision problem (first-order dilemma) of public goods. Without relying on social and behavioral arguments, we show by a voluntary participation game that the accumulation of public goods can mitigate the second-order dilemma in the long run. The analysis also shows that population decrease damages the accumulation of public goods.
|Date of creation:||Aug 2006|
|Date of revision:|
|Note:||This is a completely revised version of Discussion Paper #2005-10 "Accumulation of Public Goods and Population Change in a Voluntary Participation Game."|
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