Public Good Provision with a Governor

Chowdhury Mohammad S Anwar, Alexander Matros and Sonali SenGupta

Papers from arXiv.org

Abstract: We study a public good game with N citizens and a Governor who allocates resources from a common fund. Citizens may voluntarily contribute or be compelled to do so if audited, in which case shirkers face a penalty. The Governor decides how much of the fund to devote to public good provision, with the remainder embezzled. Crucially, the Governor's utility combines material payoffs from embezzlement with belief-dependent reputational concerns. We fully characterize the symmetric subgame perfect equilibria (SSPE) of the game. The model always admits at least one pure-strategy equilibrium, ranging from universal free-riding with complete embezzlement to full contribution with efficient provision. Mixed-strategy equilibria exist only in a narrow region of parameter values and may involve multiple equilibria. Our analysis highlights the roles of penalties, audits, and reputational incentives in sustaining contribution and provision, thereby linking public good provision with the broader literature on corruption, embezzlement, and psychological game theory.

Date: 2022-10, Revised 2025-09
New Economics Papers: this item is included in nep-gth and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://arxiv.org/pdf/2210.10642 Latest version (application/pdf)

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:arx:papers:2210.10642

Access Statistics for this paper

More papers in Papers from arXiv.org
Bibliographic data for series maintained by arXiv administrators ().