Contests Over Public Goods: Evolutionary Stability and the Free-Rider Problem

22 Pages Posted: 28 Jun 2002

See all articles by Wolfgang Leininger

Wolfgang Leininger

University of Dortmund - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Date Written: April 2002

Abstract

We analyze group contests for public goods by applying the solution concept of an evolutionary stable strategy (ESS). We show that a global ESS cannot exist, because a mutant free-rider can always invade group behavior successfully. There does exist, however, a unique local ESS, which we identify with evolutionary equilibrium. It coincides with Nash equilibrium, the hitherto dominant solution concept in contest theory, if and only if groups are symmetric. For asymmetric groups it always proposes a different and arguably more sensible solution than Nash equilibrium. We explore the properties of (local) ESS in detail.

Keywords: Contests, Public Goods, Evolutionary Stability

JEL Classification: C79, D71, D72, H41

Suggested Citation

Leininger, Wolfgang, Contests Over Public Goods: Evolutionary Stability and the Free-Rider Problem (April 2002). Available at SSRN: https://ssrn.com/abstract=316621

Wolfgang Leininger (Contact Author)

University of Dortmund - Department of Economics ( email )

D-44221 Dortmund
Germany
+49 231 755 3297 (Phone)
+49 231 755 3027 (Fax)

CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

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