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GETTING THE BALL ROLLING: VOLUNTARY CONTRIBUTIONS TO A LONG-TERM PUBLIC PROJECT
Category: Economic Theory
Public Goods Sunday 25th August 2002, 09:30 - 11:00, Room: 5.7
Session Chair(s):
Huseyin Yildirim, Duke University, UNITED STATES
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Abstract:
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I consider an incomplete information model of voluntary contributions to a long term public project. While agents can observe the progress of the project and their own costs of contribution, they have incomplete information about the contribution costs of others. The equilibrium pattern of contributions is influenced by two opposing incentives: First, agents prefer to free ride on others for contributions. Second, agents also wish to encourage each other to contribute by increasing their own contributions. Main findings include: (1) Agents make concessions toward the completion of the project by increasing their contributions as the project moves forward, (2) as additional agents join the group, existing agents increase their contributions in some states and reduce it in others, (3) despite this nonmonotonicity, agents do strictly benefit from additional agents, (4) the project progresses too slowly from the social standpoint.
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Find this file in the \Papers\46\ folder of this CD-ROM.
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