Collective Action and Intra-group Conflict with Fixed Budgets

Abstract

We study collective action under adverse incentives: each member of the group has a given budget ('use-it-or-lose-it') that is his private information and that can be used for contributions to make the group win a prize and for internal fights about this very prize. Even in the face of such rivalry in resource use, the group often succeeds to overcome the collective action problem in non-cooperative equilibrium. In one type of equilibrium, all group members jointly contribute; in the other type of equilibrium volunteers make full stand-alone contributions. Both types of equilibrium exist for larger and partially overlapping parameter ranges.

Keywords: Blotto budgets, intra-group conflict, threshold public good, collective action, all-pay auction, incomplete information

JEL Classification: D72; D74