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Title: Collective Choice in Dynamic Public Good Provision

Author(s): T. Renee Bowen, George Georgiadis and Nicolas Lambert

Publication Date: November 2016

Keyword(s): authority, collective choice, contribution games, free-riding and Public Goods

Programme Area(s): Industrial Organization and Public Economics

Abstract: Two heterogeneous agents contribute over time to a joint project, and collectively decide its scope. A larger scope requires greater cumulative effort and delivers higher benefits upon completion. We show that the efficient agent prefers a smaller scope, and preferences are time-inconsistent: as the project progresses, the efficient (inefficient) agent's preferred scope shrinks (expands). We characterize the equilibrium outcomes under dictatorship and unanimity, with and without commitment. We find that an agent's degree of efficiency is a key determinant of control over project scopes. From a welfare perspective, it may be desirable to allocate decision rights to the inefficient agent.

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Bibliographic Reference

Bowen, T, Georgiadis, G and Lambert, N. 2016. 'Collective Choice in Dynamic Public Good Provision'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=11602