Overcoming problems of coordination and freeriding in a game with multiple public goods: dynamic contribution with information provision

Ai Takeuchi () and Erika Seki
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Ai Takeuchi: Ritsumeikan University

The Japanese Economic Review, 2023, vol. 74, issue 3, No 6, 379-411

Abstract: Abstract This study analyzes the role of information in overcoming the twin problems of freeriding and coordination failure that arise in the provision of social services with multiplicity and diminishing marginal return. We consider a model with two public goods, each of which has a threshold of effective contribution such that any costly contributions beyond the threshold generate no benefit. We analyze whether the provision of information on the threshold, which represents the need for contributions to social services, helps improve efficiency. The theoretical analyses predict that information provision enables prosocial individuals to match the thresholds, thus improving outcome efficiency. The experimental analyses confirm this prediction under a dynamic contribution system: the information on thresholds, together with the real-time update of cumulative contributions, promotes the efficient provision of multiple public goods. However, the analysis of contribution timings reveals a side effect of such information: it causes more freeriding when the need is small.

Keywords: Charity; Freeriding; Coordination; Multiple public goods; Experiment; Information; Charity; Freeriding; Coordination; Multiple public goods; Experiment; Information (search for similar items in EconPapers)
JEL-codes: C72 C91 C92 H41 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s42973-023-00133-6

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