Cooperative versus Noncooperative Behavior: The Case of Agricultural Research

Jyoti Khanna

The Review of Economics and Statistics, 1993, vol. 75, issue 2, 346-52

Abstract: Voluntary provision of public goods is generally considered suboptimal. This result is based on the underlying assumption of noncooperation resulting in the standard Nash-Cournot outcome. Agents, however, can reach a cooperative equilibrium if the aggregate level of the public good provided has to coincide across agents, given each agent's tax-share. The resulting Lindahl equilibrium implies Pareto-optimal provision of the public good. This paper tests these two competing models by taking the case of agricultural research in the United States. Results indicate that, in over 50 percent of the cases, agents follow the noncooperative scheme. Copyright 1993 by MIT Press.

Date: 1993
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