Contributing or Free-Riding? Voluntary Participation in a Public Good Economy
Taiji Furusawa () and
Hideo Konishi ()
No 681, Boston College Working Papers in Economics from Boston College Department of Economics
We consider a (pure) public goods provision problem with voluntary participation in a quasi-linear economy. We propose a new hybrid solution concept, the free-riding-proof core (FRP-Core), which endogenously determine a contribution group, public good provision level, and its cost-sharing. The definition of the FRP-Core is based on credibility of coalitional deviations. The FRP-Core is always nonempty in public good economy but does not usually achieve global efficiency. The FRP-Core has support from both cooperative and noncooperative games. In particular, it is equivalent to the set of perfectly coalition-proof Nash equilibrium (Bernheim, Peleg and Whinston, 1987 JET) of a dynamic game with participation decision followed by a common agency game. We illustrate the properties of the FRP-Core with an example. We also show that the equilibrium level of public good shrinks to zero as the economy is replicated.
Keywords: endogenous coalition formation; externalities; public good; perfectly coalition-proof Nash equilibrium; free riders; free-riding-proof core; lobbying; common agency game (search for similar items in EconPapers)
JEL-codes: C71 C72 F13 H41 (search for similar items in EconPapers)
Date: 2008-02-11, Revised 2010-08-04
New Economics Papers: this item is included in nep-cdm, nep-cta, nep-gth, nep-pbe and nep-pol
Note: Previously circulated as "Contributing or Free-Riding? A Theory of Endogenous Lobby Formation"
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed
Published, Theoretical Economics 6, 219-256, 2011.
Downloads: (external link)
http://fmwww.bc.edu/EC-P/wp681.pdf main text (application/pdf)
Journal Article: Contributing or free-riding? Voluntary participation in a public good economy (2011)
Working Paper: Contributing or Free-Riding? Voluntary Participation in a Public Good Economy (2011)
Working Paper: Contributing or Free-Riding? Voluntary Participation in a Public Good Economy (2010)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:boc:bocoec:681
Access Statistics for this paper
More papers in Boston College Working Papers in Economics from Boston College Department of Economics Boston College, 140 Commonwealth Avenue, Chestnut Hill MA 02467 USA. Contact information at EDIRC.
Bibliographic data for series maintained by Christopher F Baum ().