Free-Rider Effects in Rent-Seeking Groups Competing for Public Goods

Edna Loehman, Fabrice N Quesnel and Emerson M Babb

Public Choice, 1996, vol. 86, issue 1-2, 35-61

Abstract: This paper studies individual behavior within a group when there is rent-seeking and groups compete in the selection of a public good - a variant of the traditional public goods problem. The situation is different from traditional public goods because an individual may not receive no reward for contribution to the group if the group does not win. Based on theory, the optimal contribution varies strategically depending on the characteristics of the situation, individual risk preferences, income, and subjective probability of winning. Individual contributions or bids toward a group objective were tested experimentally. Results showed that use of a demand revealing mechanism did not produce a significant difference in individual contributions to group efforts when the level of reward was low and when rewards were indirect. However, the demand revealing mechanism caused a significant difference in bids when rewards were high and direct, thus indicating free-riding behavior. Copyright 1996 by Kluwer Academic Publishers

Date: 1996
References: Add references at CitEc
Citations: View citations in EconPapers (6)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:pubcho:v:86:y:1996:i:1-2:p:35-61

Ordering information: This journal article can be ordered from
http://www.springer. ... ce/journal/11127/PS2

Access Statistics for this article

Public Choice is currently edited by WIlliam F. Shughart II

More articles in Public Choice from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().