Collective Choice in Dynamic Public Good Provision

American Economic Journal: Microeconomics, Forthcoming

61 Pages Posted: 28 Sep 2015 Last revised: 26 May 2018

See all articles by T. Renee Bowen

T. Renee Bowen

University of California, San Diego; National Bureau of Economic Research; Center for Commerce and Diplomacy (CCD)

George Georgiadis

Northwestern University - Department of Management & Strategy

Nicolas S. Lambert

Stanford Graduate School of Business - Knight Management Center

Multiple version iconThere are 4 versions of this paper

Date Written: May 1, 2018

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: free-riding, collective choice, public goods, contribution games, authority

JEL Classification: C73, H41, D70, D78

Suggested Citation

Bowen, T. Renee and Georgiadis, George and Lambert, Nicolas S., Collective Choice in Dynamic Public Good Provision (May 1, 2018). American Economic Journal: Microeconomics, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2666101 or http://dx.doi.org/10.2139/ssrn.2666101

T. Renee Bowen

University of California, San Diego ( email )

9500 Gilman Drive #0519
La Jolla, CA 92093-0519
United States

HOME PAGE: http://https://sites.google.com/site/tamarareneebowenlyn/

National Bureau of Economic Research ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Center for Commerce and Diplomacy (CCD) ( email )

9500 Gilman Dr.
La Jolla, CA 92093

HOME PAGE: http://https://ccd.ucsd.edu/

George Georgiadis (Contact Author)

Northwestern University - Department of Management & Strategy ( email )

Kellogg School of Management
2001 Sheridan Road
Evanston, IL 60208
United States

HOME PAGE: http://www.kellogg.northwestern.edu/faculty/georgiadis/index.html

Nicolas S. Lambert

Stanford Graduate School of Business - Knight Management Center ( email )

655 Knight Way
Stanford, CA 94305-7298
United States

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