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Private Provision of Public Goods that are Complements for Private Goods: Application to Open Source Software Developments

35 Pages Posted: 5 Feb 2012  

Noriaki Matsushima

Osaka University - Institute of Social and Economic Research (ISER)

Ryusuke Shinohara

Department of Economics, Hosei University

Date Written: February 1, 2012

Abstract

This paper examines the questions of who participates in the provision of a public good through the voluntary participation of agents in the presence of strong complementarity between a public good and a private good. We show that the greater the initial endowment of the private good that agents have, the more likely they are to participate in the provision of the public good. Whether an agent participates does not depend on the efficiency of his/her technology for production of the public good. We extend the basic model and introduce a simple transfer game. We show a sufficient condition so that the voluntary transfer scheme achieves Pareto efficiency.

Keywords: public goods, voluntary participation, strong complementarity, transfer of private goods

JEL Classification: C72, H41, L17

Suggested Citation

Matsushima, Noriaki and Shinohara, Ryusuke, Private Provision of Public Goods that are Complements for Private Goods: Application to Open Source Software Developments (February 1, 2012). ISER Discussion Paper No. 830. Available at SSRN: https://ssrn.com/abstract=1997772 or http://dx.doi.org/10.2139/ssrn.1997772

Noriaki Matsushima (Contact Author)

Osaka University - Institute of Social and Economic Research (ISER) ( email )

6-1 Mihogaoka
Ibaraki, Osaka 567-0047
Japan

Ryusuke Shinohara

Department of Economics, Hosei University ( email )

4342
Aihara-machi
Machida, Tokyo 194-0298
Japan
+81-42-783-2534 (Phone)

HOME PAGE: http://ryusukeshinohara.ehoh.net/

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