Pre-negotiation commitment and internalization in public good provision through bilateral negotiations
Noriaki Matsushima and
ISER Discussion Paper from Institute of Social and Economic Research, Osaka University
We investigate public good provision through bilateral negotiations between a public-good supplier and the beneficiaries of the good. We find that although a pre-negotiation commitment on the production level of the public good by the supplier enhances the internalization of beneficiaries' preferences, the good is not necessarily provided efficiently. We show that with the commitment, the supplier produces the public good at an efficient level in equilibrium if and only if its bargaining power is sufficiently weak. In addition, the public good may be produced excessively as a result of the commitment when the supplier's bargaining power is sufficiently strong.
Date: 2015-09, Revised 2017-08
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed
Downloads: (external link)
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:dpr:wpaper:0948r
Access Statistics for this paper
More papers in ISER Discussion Paper from Institute of Social and Economic Research, Osaka University Contact information at EDIRC.
Bibliographic data for series maintained by Fumiko Matsumoto ().