Inequality and the allocation of collective goods

Caleb A. Cox and Brock Stoddard

Journal of Economic Behavior & Organization, 2024, vol. 220, issue C, 756-767

Abstract: We examine the allocation of a voluntarily-provided collective good with inequality in endowments or productive capabilities. After group members choose their contributions to a collective good, a third-party allocator distributes the resulting value among the group members. With and without inequality, we find allocators significantly improve efficiency compared to automatic equal division of the collective good. However, inequality creates a conflict between various notions of equitable distribution, potentially diminishing the allocator's ability to incentivize contribution. Our results show that inequality in endowments or productive capabilities reduces the effectiveness of allocators compared to the baseline case of equality.

Date: 2024
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Working Paper: Inequality and the Allocation of Collective Goods (2023)
Working Paper: Inequality and the Allocation of Collective Goods (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:220:y:2024:i:c:p:756-767

DOI: 10.1016/j.jebo.2024.02.009

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