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Collective Choice in Dynamic Public Good Provision: Real versus Formal Authority

Author

Listed:
  • Nicolas Lambert

    (Stanford University)

  • George Georgiadis

    (Northwestern University, Kellogg School)

  • Renee Bowen

    (Stanford University)

Abstract

Two heterogeneous agents exert effort over time to complete a project and collectively decide its scope. A larger scope requires greater cumulative effort and delivers higher benefits upon completion. To study the scope under collective choice, we derive the agents' preferences over scopes. The efficient agent prefers a smaller scope, and preferences are time-inconsistent: as the project progresses, the efficient agent's preferred scope shrinks, whereas the inefficient agent's preferred scope expands. In equilibrium without commitment, the efficient agent obtains his ideal project scope with either agent as dictator and under unanimity. In this sense, the efficient agent always has real authority.

Suggested Citation

  • Nicolas Lambert & George Georgiadis & Renee Bowen, 2016. "Collective Choice in Dynamic Public Good Provision: Real versus Formal Authority," 2016 Meeting Papers 197, Society for Economic Dynamics.
  • Handle: RePEc:red:sed016:197
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    References listed on IDEAS

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