Stackelberg leadership and transfers in private provision of public goods

Kai Konrad, Wolfgang Buchholz () and Kjell Lommerud ()

Review of Economic Design, 1997, vol. 3, issue 1, 29-43

Abstract: We consider transfers in a Stackelberg game of private provision of a public good. It turns out that the agent who is the follower in the process of making voluntary contributions to a public good may have an incentive to make monetary transfers to the Stackelberg leader even in a situation where neither has a comparative advantage in making contributions to the public good. The Stackelberg leader is willing to accept such transfers if the actual contribution game is fully non-cooperative because the transfer generates a Pareto superior outcome. If the contributions in the Stackelberg equilibrium is the threat point of a possible cooperative Nash bargaining game, the Stackelberg leader will refuse to accept the transfer if she can.

Keywords: Voluntary provision of public goods; Stackelberg games (search for similar items in EconPapers)
Date: 1997-11-27
Note: Received: 30 June 1995 / Accepted: 18 February 1997
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