Enhancing Voluntary Contribution in a Public Goods Economy via a Minimum Individual Contribution Level

Michela Chessa and Patrick Loiseau
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Patrick Loiseau: EURECOM

No 2017-24, GREDEG Working Papers from Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France

Abstract: We consider the problem of increasing the total level of contribution in a public goods economy modeled as a non-linear public goods game. We propose a simple intervention that restricts the individuals strategy sets by imposing a minimum individual contribution level (while still allowing free-riding); and we investigate theoretically the potential of this intervention as a mechanism design tool. In particular we show that, for a well-chosen value of the minimum individual contribution level, our intervention does not incentivize any free-riding and strictly increases the total contribution level—compared to voluntary contributions—at a unique potential maximizer equilibrium. This is appealing because such a non-intrusive intervention is easily implementable in many different settings where normative or monetary interventions have met little acceptance. We present a motivating application in the domain of information economics about contribution of personal data to a data analytics project.

Keywords: Public goods; Voluntary contribution; Potential maximizer Nash equilibria; Minimum contribution level; Privacy (search for similar items in EconPapers)
JEL-codes: C72 H41 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2017-09, Revised 2023-02
New Economics Papers: this item is included in nep-des, nep-gth and nep-mic
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Persistent link: https://EconPapers.repec.org/RePEc:gre:wpaper:2017-24

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