Collective Choice in Dynamic Public Good Provision: Real versus Formal Authority

Nicolas Lambert, George Georgiadis and T. Renee Bowen
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George Georgiadis: Northwestern University, Kellogg School

No 197, 2016 Meeting Papers from Society for Economic Dynamics

Abstract: Two heterogeneous agents exert effort over time to complete a project and collectively decide its scope. A larger scope requires greater cumulative effort and delivers higher benefits upon completion. To study the scope under collective choice, we derive the agents' preferences over scopes. The efficient agent prefers a smaller scope, and preferences are time-inconsistent: as the project progresses, the efficient agent's preferred scope shrinks, whereas the inefficient agent's preferred scope expands. In equilibrium without commitment, the efficient agent obtains his ideal project scope with either agent as dictator and under unanimity. In this sense, the efficient agent always has real authority.

Date: 2016
New Economics Papers: this item is included in nep-cdm, nep-mic and nep-ppm
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Working Paper: Collective Choice in Dynamic Public Good Provision: Real versus Formal Authority (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:red:sed016:197

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