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On Sequential and Simultaneous Contributions under Incomplete Information

  • Parimal Bag

    ()

    (National University of Singapore, Singapore.)

  • Santanu Roy

    ()

    (Southern Methodist University, Dallas, Texas.)

Under incomplete information about (independent) private valuations of a public good, we establish sufficient conditions under which, despite the incentive to free ride on future contributors, the expected total amount of voluntary contributions is higher when agents contribute sequentially (observing prior contributions) rather than simultaneously. We establish this in a conventional framework with quasi-linear utility where agents care only about the total provision of the public good (rather than individual contribution levels) and there is no non-convexity in provision of the public good. We allow for arbitrary number of agents and fairly general distribution of types.

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File URL: ftp://ftp1.economics.smu.edu/WorkingPapers/2008/SROY/SROY-2008-08-rev-2008-11.pdf
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Paper provided by Southern Methodist University, Department of Economics in its series Departmental Working Papers with number 0805.

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Date of creation: Aug 2008
Date of revision: Nov 2008
Handle: RePEc:smu:ecowpa:0805
Contact details of provider: Postal: Department of Economics, P.O. Box 750496, Southern Methodist University, Dallas, TX 75275-0496
Phone: 214-768-2715
Fax: 214-768-1821
Web page: http://www.smu.edu/economics

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  1. Gradstein, Mark, 1992. "Time Dynamics and Incomplete Information in the Private Provision of Public Goods," Journal of Political Economy, University of Chicago Press, vol. 100(3), pages 581-97, June.
  2. Coats, Jennifer C. & Gronberg, Timothy J. & Grosskopf, Brit, 2009. "Simultaneous versus sequential public good provision and the role of refunds -- An experimental study," Journal of Public Economics, Elsevier, vol. 93(1-2), pages 326-335, February.
  3. Eyal Winter, 2006. "Optimal incentives for sequential production processes," RAND Journal of Economics, RAND Corporation, vol. 37(2), pages 376-390, 06.
  4. Glazer, Amihai & Konrad, Kai A, 1996. "A Signaling Explanation for Charity," American Economic Review, American Economic Association, vol. 86(4), pages 1019-28, September.
  5. Potters, J.J.M. & Sefton, M. & Vesterlund, L., 2003. "After You - Endogenous Sequencing in Voluntary Contribution Games," Discussion Paper 2003-98, Tilburg University, Center for Economic Research.
  6. Leslie M. Marx & Steven A. Matthews, 1997. "Dynamic Voluntary Contribution to a Public Project," Discussion Papers 1188, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  7. James Bessen & Eric Maskin, 2006. "Sequential Innovation, Patents, and Imitation," Economics Working Papers 0025, Institute for Advanced Study, School of Social Science.
  8. ParimalKanti Bag & Santanu Roy, 2008. "Repeated Charitable Contributions under Incomplete Information," Economic Journal, Royal Economic Society, vol. 118(525), pages 60-91, 01.
  9. Murali Agastya & Flavio Menezes & Kunal Sengupta, 2005. "Cheap talk, Efficiency and Egalitarian Cost Sharing In Joint Projects," Levine's Working Paper Archive 784828000000000551, David K. Levine.
  10. Varian, Hal R., 1994. "Sequential contributions to public goods," Journal of Public Economics, Elsevier, vol. 53(2), pages 165-186, February.
  11. Kyle Bagwell, 1992. "Commitment and Observability in Games," Discussion Papers 1014, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  12. Menezes, Flavio M. & Monteiro, Paulo K. & Temimi, Akram, 2001. "Private provision of discrete public goods with incomplete information," Journal of Mathematical Economics, Elsevier, vol. 35(4), pages 493-514, July.
  13. Theodore Groves & John Ledyard, 1976. "Optimal Allocation of Public Goods: A Solution to the 'Free Rider Problem'," Discussion Papers 144, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  14. Fershtman, Chaim & Nitzan, Shmuel, 1991. "Dynamic voluntary provision of public goods," European Economic Review, Elsevier, vol. 35(5), pages 1057-1067, July.
  15. Bagnoli, Mark & Lipman, Barton L, 1989. "Provision of Public Goods: Fully Implementing the Core through Private Contributions," Review of Economic Studies, Wiley Blackwell, vol. 56(4), pages 583-601, October.
  16. Palfrey, Thomas R. & Rosenthal, Howard, 1988. "Private incentives in social dilemmas : The effects of incomplete information and altruism," Journal of Public Economics, Elsevier, vol. 35(3), pages 309-332, April.
  17. Romano, Richard & Yildirim, Huseyin, 2001. "Why charities announce donations: a positive perspective," Journal of Public Economics, Elsevier, vol. 81(3), pages 423-447, September.
  18. Cremer, Jacques, & Riordan, Michael H, 1985. "A Sequential Solution to the Public Goods Problem," Econometrica, Econometric Society, vol. 53(1), pages 77-84, January.
  19. Neil Bruce, 1989. "Defence Expenditures by Countries in Allied and Adversarial Relationships," Working Papers 745, Queen's University, Department of Economics.
  20. Admati, Anat R & Perry, Motty, 1991. "Joint Projects without Commitment," Review of Economic Studies, Wiley Blackwell, vol. 58(2), pages 259-76, April.
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