Collective Choice in Dynamic Public Good Provision
53 Pages Posted: 7 Nov 2016
There are 4 versions of this paper
Collective Choice in Dynamic Public Good Provision
Collective Choice in Dynamic Public Good Provision: Real versus Formal Authority
Collective Choice in Dynamic Public Good Provision
Date Written: November 2016
Abstract
Two heterogeneous agents contribute over time to a joint project, and collectively decide its scope. A larger scope requires greater cumulative effort and delivers higher benefits upon completion. We show that the efficient agent prefers a smaller scope, and preferences are time-inconsistent: as the project progresses, the efficient (inefficient) agent's preferred scope shrinks (expands). We characterize the equilibrium outcomes under dictatorship and unanimity, with and without commitment. We find that an agent's degree of efficiency is a key determinant of control over project scopes. From a welfare perspective, it may be desirable to allocate decision rights to the inefficient agent.
Keywords: authority, collective choice, contribution games, free-riding, Public Goods
JEL Classification: C73, D70, D78, H41
Suggested Citation: Suggested Citation