The possibility of efficient provision of a public good in voluntary participation games
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In this study, we provide the conditions for efficient provision of a public good in a participation game in which a non-negative integer number of units of the public good can be provided. In the case in which at most one unit of the public good can be provided, we provide refinements of Nash equilibria at which agents choose only a Nash equilibrium with an efficient allocation and provide sufficient conditions for cost-sharing rules that guarantee the existence of a Nash equilibrium with an efficient allocation. In the case of a multi-unit public good, we provide a necessary and sufficient condition for the existence of a Nash equilibrium with an efficient allocation and prove that Nash equilibria are less likely to support efficient allocations if the participation of many agents is needed for efficient provision of the public good in the case of identical agents.
KeywordsNash Equilibrium Public Good Budget Balance Payoff Matrix Public Good Provision
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