Information Disclosure and Voluntary Contributions to Public Goods
Siew Hong Teoh
University of California - Paul Merage School of Business
RAND JOURNAL OF ECONOMICS, Vol 28 No 3
This paper analyzes the effect of information generation and disclosure upon free riding and on the likelihood that cooperative efforts collapse in a public goods game. The model shows that the prospect of greater disclosure can make all individuals worse off ex ante by reducing expected contributions to the public good. Conditions under which disclosure becomes either more or less desirable are derived as a function of the number of individual contributors. Regulation or competitive problems that increase direct costs of disclosure may on average increase the provision of public goods and improve welfare. The desirability of disclosure in the contexts of collective political action, debt renegotiation, and production in teams are discussed.
JEL Classification: D82, D62, H41Accepted Paper Series
Date posted: March 5, 1997
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