Collective Choice in Dynamic Public Good Provision

51 Pages Posted: 31 Oct 2016 Last revised: 22 Sep 2021

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 - Kellogg School of Management

Nicolas S. Lambert

Stanford Graduate School of Business - Knight Management Center

Multiple version iconThere are 4 versions of this paper

Date Written: October 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.

Suggested Citation

Bowen, T. Renee and Georgiadis, George and Lambert, Nicolas S., Collective Choice in Dynamic Public Good Provision (October 2016). NBER Working Paper No. w22772, Available at SSRN: https://ssrn.com/abstract=2861704

T. Renee Bowen (Contact Author)

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Center for Commerce and Diplomacy (CCD) ( email )

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George Georgiadis

Northwestern University - Kellogg School of Management ( email )

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Nicolas S. Lambert

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

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