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Social Choice and Welfare

, Volume 40, Issue 3, pp 793–814 | Cite as

A voluntary participation game through a unit-by-unit cost share mechanism of a non-excludable public good

  • Yukihiro Nishimura
  • Ryusuke Shinohara
Original Paper

Abstract

The strategic analysis of voluntary participation in the public good provision has shown two distinct results. First, when the provision of public goods is binary, there are Nash equilibria supporting efficient allocations, and these are Strong Nash equilibria of the game. On the other hand, a model of a continuous public good (Saijo–Yamato, J Econ Theory 84:227–242, 1999) showed that the participation of all agents is not an equilibrium in many situations. This article considers the provision of a discrete and multi-unit public good, and examines a unit-by-unit participation game. Namely, people are asked to participate in each unit of public good provision, and those who chose to participate share the marginal cost of public good. In this game of public good provision, there are subgame-perfect equilibria that are Pareto efficient. We also use the refinement concepts to eliminate inefficient subgame-perfect equilibria and also to characterize the efficient subgame-perfect equilibria.

Keywords

Nash Equilibrium Public Good Voluntary Participation Public Good Provision Stage Game 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Springer-Verlag 2012

Authors and Affiliations

  1. 1.Graduate School of EconomicsOsaka UniversityToyonaka-shiJapan
  2. 2.Department of EconomicsShinshu UniversityMatsumotoJapan

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