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Designing rebate rules in public goods provision: Axioms, limits, and comparisons

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  • Rouault, Cyril
  • Zoroglu, Resul

Abstract

This paper examines rebate rules in the context of public goods provision. These rules aim to redistribute the surplus when total contributions exceed the cost of the project. Using an axiomatic approach, we establish impossibility results that highlight the inherent tensions between fairness, participation incentives, and contribution incentives. We then propose and characterize the Proportional Rebate with Threshold rule, which identifies a coherent trade-off across these objectives.

Suggested Citation

  • Rouault, Cyril & Zoroglu, Resul, 2025. "Designing rebate rules in public goods provision: Axioms, limits, and comparisons," Working Paper Series in Economics 175, Karlsruhe Institute of Technology (KIT), Department of Economics and Management.
    • Handle: RePEc:zbw:kitwps:335020
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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