Public goods game with ambiguous threshold

Daiki Kishishita and Hiroyuki Ozaki

Economics Letters, 2020, vol. 191, issue C

Abstract: Various collective action problems can be described as a discrete public goods game with a threshold. In this game, players may be reluctant to contribute to the provision of public goods when the threshold value is uncertain. We derive equilibria when players face ambiguity (i.e., Knightian uncertainty) on the threshold value by using Choquet expected utility. Furthermore, we show that in a class of neo-additive capacities, an increase in ambiguity decreases the equilibrium maximal number of contributors, irrespective of players’ ambiguity-attitudes. This contrasts to what McBride (2006) shows when the probability distribution is known.

Keywords: Collective action; Public goods; Ambiguity; Choquet expected utility (search for similar items in EconPapers)
JEL-codes: C70 D81 H41 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:191:y:2020:i:c:s0165176520301282

DOI: 10.1016/j.econlet.2020.109165

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