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Provision of Differentiated Public Goods within Organizations

Author

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  • Zudenkova, Galina

Abstract

This paper analyzes provision of a differentiated public good within an organization. A moderate principal assigns a public good production to one of two extreme agents. A contributing agent then gets the opportunity to choose a public good variety he prefers but has to carry a cost of production. If a production cost is lower than a benefit from having their preferred public good variety implemented then the agents seek assignment. I show that in this case the principal makes the agents compete by committing to public good varieties they would provide if selected. The agents want to make themselves an attractive choice and so announce moderate (still divergent) varieties if production is costly, and the principal's preferred variety if production is not costly. However, if the production cost exceeds the benefit from having their preferred public good variety implemented then the agents want to avoid assignment. My results suggest that in this case the principal just assigns an unpopular public good production to a less extreme agent.

Suggested Citation

  • Zudenkova, Galina, 2013. "Provision of Differentiated Public Goods within Organizations," MPRA Paper 50489, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:50489
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    File URL: https://mpra.ub.uni-muenchen.de/50489/1/MPRA_paper_50489.pdf
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    References listed on IDEAS

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    1. repec:cup:apsrev:v:77:y:1983:i:01:p:142-157_24 is not listed on IDEAS
    2. Harbaugh, William T., 1998. "What do donations buy?: A model of philanthropy based on prestige and warm glow," Journal of Public Economics, Elsevier, vol. 67(2), pages 269-284, February.
    3. Cornes,Richard & Sandler,Todd, 1996. "The Theory of Externalities, Public Goods, and Club Goods," Cambridge Books, Cambridge University Press, number 9780521477185.
    4. 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.
    5. Anthony Downs, 1957. "An Economic Theory of Political Action in a Democracy," Journal of Political Economy, University of Chicago Press, vol. 65, pages 135-135.
    6. repec:cup:apsrev:v:103:y:2009:i:04:p:570-587_99 is not listed on IDEAS
    7. Cornes, Richard & Sandler, Todd, 1994. "The comparative static properties of the impure public good model," Journal of Public Economics, Elsevier, vol. 54(3), pages 403-421, July.
    8. Andreoni, James, 1988. "Privately provided public goods in a large economy: The limits of altruism," Journal of Public Economics, Elsevier, vol. 35(1), pages 57-73, February.
    9. Wittman, Donald, 1977. "Candidates with policy preferences: A dynamic model," Journal of Economic Theory, Elsevier, vol. 14(1), pages 180-189, February.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Differentiated Public Goods; Public Good Provision; Spatial Competition.;

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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