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Private Provision of Public Goods between Families

Author

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  • CORNES, Richard
  • ITAYA, Jun-ichi
  • TANAKA, Aiko

Abstract

We consider a two-stage voluntary provision model where individuals in a family contribute to inter-family public goods, and, at the same time, the parent makes private transfers to her child within the same family. We show not only that Warr’s neutrality holds regardless of the different timings of parent-to-child transfers, but also that there is a continuum of Nash equilibria in the sense that individuals’ contributions and parental transfers are indeterminate, although the allocation of each’s private consumption and total public good provision is uniquely determined. We further show that, in the presence of impure altruism, neutrality and uniqueness of the equilibrium allocation persist.

Suggested Citation

  • CORNES, Richard & ITAYA, Jun-ichi & TANAKA, Aiko, 2007. "Private Provision of Public Goods between Families," Discussion paper series. A 194, Graduate School of Economics and Business Administration, Hokkaido University.
  • Handle: RePEc:hok:dpaper:194
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    File URL: http://hdl.handle.net/2115/30280
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    References listed on IDEAS

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    Cited by:

    1. Emilson C.D. Silva, 2016. "Decentralized Leadership," CESifo Working Paper Series 6064, CESifo Group Munich.
    2. João Ricardo Faria & Emilson C.D. Silva, 2017. "Optimal Timing in Rotten Kid Families," CESifo Working Paper Series 6333, CESifo Group Munich.

    More about this item

    Keywords

    private provision; public good; Nash equilibrium; subgame perfect equilibrium; family; C72; D64; H41;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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