Pareto Improvement through Unilateral Matching of Public Good Contributions: The Role of Commitment
9 Pages Posted: 9 Jul 2014
Date Written: June 25, 2014
Abstract
When providing public goods through voluntary contributions, a donor may introduce unilateral matching in order to reduce underprovision of the public good and thus inefficiency. By itself, however, matching benefits the donor but harms the recipient. We apply Cornes and Hartley’s aggregative game approach to provide a novel graphical explanation of this transfer paradox, and also show how it may be avoided by introducing a commitment device.
Keywords: voluntary public good provision, matching, commitment
JEL Classification: H23, H41
Suggested Citation: Suggested Citation
Buchholz, Wolfgang and Cornes, Richard C. and Peters, Wolfgang and Rübbelke, Dirk T. G., Pareto Improvement through Unilateral Matching of Public Good Contributions: The Role of Commitment (June 25, 2014). CESifo Working Paper Series No. 4863, Available at SSRN: https://ssrn.com/abstract=2463602 or http://dx.doi.org/10.2139/ssrn.2463602
Do you have negative results from your research you’d like to share?
Feedback
Feedback to SSRN
If you need immediate assistance, call 877-SSRNHelp (877 777 6435) in the United States, or +1 212 448 2500 outside of the United States, 8:30AM to 6:00PM U.S. Eastern, Monday - Friday.