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Collective Choice in Dynamic Public Good Provision

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  • T. Renee Bowen
  • George Georgiadis
  • Nicolas S. Lambert

Abstract

Two heterogeneous agents contribute over time to a joint project, and collectively decide its scope. A larger scope requires greater cumulative effort and delivers higher benefits upon completion. We show that the efficient agent prefers a smaller scope, and preferences are time-inconsistent: as the project progresses, the efficient (inefficient) agent’s preferred scope shrinks (expands). We characterize the equilibrium outcomes under dictatorship and unanimity, with and without commitment. We find that an agent’s degree of efficiency is a key determinant of control over project scopes. From a welfare perspective, it may be desirable to allocate decision rights to the inefficient agent.

Suggested Citation

  • T. Renee Bowen & George Georgiadis & Nicolas S. Lambert, 2016. "Collective Choice in Dynamic Public Good Provision," NBER Working Papers 22772, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:22772
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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