Threshold levels and the realization of a group benefit

Xiaopeng Xu ()
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Xiaopeng Xu: University of California-Berkeley

Economics Bulletin, 2002, vol. 3, issue 16, 1-8

Abstract: This paper considers a voluntary contribution threshold game in which a group benefit is realized only if the number of contributors at least reaches a threshold level, and analyzes the effect of the threshold level on the likelihood that the group benefit is realized. Changes in the threshold level in interior symmetric equilibrium have two effects on the likelihood, the direct, threshold effect and the indirect, strategic effect. While the direct effect is always negative, the indirect effect can be either positive or negative. And the net effect is not necessarily negative.

Keywords: direct; effect (search for similar items in EconPapers)
JEL-codes: C7 H4 (search for similar items in EconPapers)
Date: 2002-09-04
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