Profit-Maximizing Sale of a Discrete Public Good via the Subscription Game in Private-Information Environments

Stefano Barbieri () and David Malueg ()

The B.E. Journal of Theoretical Economics, 2010, vol. 10, issue 1, 31

Abstract: We analyze a symmetric Bayesian game in which two players individually contribute to fund a discrete public good; contributions are refunded if they do not reach a threshold set by the seller of the good. We characterize the distributions of players' private values that can support a symmetric equilibrium in continuous piecewise-linear strategies, and we calculate these strategies. Allowing the seller to charge an entry fee before players make their private contributions, we show these piecewise-linear equilibrium strategies maximize the seller's expected profit over all incentive compatible selling mechanisms.

Keywords: discrete public good; subscription game; revelation principle (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (13)

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DOI: 10.2202/1935-1704.1575

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