Customer Ownership and Quality Provision in Public Services under Asymmetric Information

Laura Abrardi, Luca Colombo and Pier Angelo Mori

No 1467, Euricse Working Papers from Euricse (European Research Institute on Cooperative and Social Enterprises)

Abstract: The implementation of projects producing external effects is often a source of disagreement and conflict between hosting and non-hosting communities.The paper focuses on the impact of participatory ownership on conflict resolution and social welfare in the presence of asymmetric information and imperfect quality monitoring. We show that in such situations the participatory solution may help solve Not-in-my-backyard (Nimby) crises and similar deadlocks that money transfers to a for-profit operator cannot solve. The analysis highlights two main factors behind this fact. First, a customer-owned cooperative internalizes, at least partially, the external effects generated by the project. Second, the alignment of cooperative members' preferences with those of the social planner reduces (in some cases eliminates) the distortions caused by information asymmetries.

Keywords: Citizen participation; customer-ownership; cooperative firm; public goods; privatization; Nimby syndrome. (search for similar items in EconPapers)
JEL-codes: H23 L33 P13 (search for similar items in EconPapers)
Date: 2014
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https://www.euricse.eu/publications/1091/ (application/pdf)

Related works:
Journal Article: CUSTOMER OWNERSHIP AND QUALITY PROVISION IN PUBLIC SERVICES UNDER ASYMMETRIC INFORMATION (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:trn:utwpeu:1467

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