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Voluntary Contributions to Multiple Public Projects

Maurice Koster, Hans Reijnierse () and Mark Voorneveld

Journal of Public Economic Theory, 2003, vol. 5, issue 1, 25-50

Abstract: The problem of financing a set of discrete public goods (facilities, projects) by private contributions is studied. The corresponding cooperative game, the realization game, is shown to be convex. For the noncooperative setting we study a realization scheme that induces a strategic game. This contribution game is shown to be a generalized ordinal potential game; a best–response in the contribution game implies a best response in a coordination game in which the payoff to all players is the utilitarian collective welfare function, i.e., the sum of the utility functions of the players. Strategy profiles maximizing utilitarian welfare are strong Nash equilibria of the contribution game. Each strong Nash equilibrium corresponds in a natural way with a core element of the realization game, and vice versa. Moreover, each strong Nash equilibrium is coalitional proof.

Date: 2003
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Working Paper: Voluntary Contribution to Multiple Public Projects (1999) Downloads
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Journal of Public Economic Theory is currently edited by Rabah Amir, Gareth Myles and Myrna Wooders

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