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Economic Theory

, Volume 56, Issue 2, pp 333–373 | Cite as

Group efforts when performance is determined by the “best shot”

  • Stefano Barbieri
  • David A. MaluegEmail author
Research Article

Abstract

We investigate the private provision of a public good whose level is determined by the maximum effort made by a group member. Costs of effort are either commonly known or privately known. For symmetric perfect-information games, any number of players may be active and we characterize the unique (mixed-strategy) equilibrium in which active contributors use the same strategy. Increasing the number of active players leads to stochastically lower individual efforts and level of the public good. When information is private, the symmetric equilibrium is in pure strategies. Increasing the number of players yields a pointwise reduction in the equilibrium contribution strategy but an increase in equilibrium payoffs. Comparative statics with respect to costs and levels of risk aversion are derived. Finally, whether information is public or private, equilibria are inefficient—we provide mechanisms that improve efficiency.

Keywords

Best-shot public good Privately provided public good   Volunteer’s dilemma 

JEL Classification

D61 D82 H41 

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Copyright information

© Springer-Verlag Berlin Heidelberg 2013

Authors and Affiliations

  1. 1.Department of Economics, 206 Tilton HallTulane UniversityNew OrleansUSA
  2. 2.Department of Economics, 3136 Sproul HallUniversity of CaliforniaRiversideUSA

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