Coordination and free-riding problems in the provision of multiple public goods

Ai Takeuchi () and Erika Seki
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Ai Takeuchi: College of Economics, Ritsumeikan University

No 19-15-Rev., Discussion Papers in Economics and Business from Osaka University, Graduate School of Economics

Abstract: This study considers the twin problems of free riding and coordination failure prevailing in the provision of multiple public goods with diminishing marginal returns in which the payoff-sum maximising Pareto optimal outcome requires less-than-full contributions by group members. We examine theoretically and experimentally whether the provision of information on the demand for public goods helps overcome these problems and improves efficiency. We construct a game of two public goods,each with an upper bound on effective contributions. Theoretical analysis predicts that this information improves efficiency as it prompts efficiency concerned individuals to match the upper bound of each public good in equilibrium.The experimental results show countervailing effects of demand information,i.e.,it improves coordination but deteriorates the free-riding problem.

Keywords: Charity; Freeriding; Coordination; Multiplepublicgoods; Laboratoryexperiment; Information. (search for similar items in EconPapers)
JEL-codes: C72 C91 C92 H41 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2020-06
New Economics Papers: this item is included in nep-exp and nep-gth
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Related works:
Journal Article: Coordination and free-riding problems in the provision of multiple public goods (2023)
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