Lotteries, Group Size and Public Good Provision

University of Alabama Economics, Finance & Legal Studies Working Paper No. 05-04-01

21 Pages Posted: 9 Apr 2005

See all articles by Paul Pecorino

Paul Pecorino

University of Alabama - Department of Economics, Finance and Legal Studies

Akram Temimi

University of Alabama, Tuscaloosa

Multiple version iconThere are 2 versions of this paper

Date Written: April 2005

Abstract

Morgan (2000) has shown that lotteries are potentially an effective mechanism for the provision of public goods. In particular, he has shown that lotteries lead to a level of provision above the level provided by the voluntary contributions mechanism. In this paper, we analyze the effect of group size on public good provision under the lottery mechanism. We consider the lottery model with identical consumers and then compute comparative statics with respect to group size. For a pure public good, the lottery performs quite well as public good provision is found to increase in group size, even when the lottery prize is held constant. By contrast, for fully rival public goods, per capita provision is found to decrease in group size, even when the lottery prize is proportional to group size. Further, the per capita level of provision will approach 0 when group size is sufficiently large.

Keywords: Collective Action, Public Goods, Group Size, Lotteries

JEL Classification: D7, H4, C72

Suggested Citation

Pecorino, Paul and Temimi, Akram, Lotteries, Group Size and Public Good Provision (April 2005). University of Alabama Economics, Finance & Legal Studies Working Paper No. 05-04-01, Available at SSRN: https://ssrn.com/abstract=699222 or http://dx.doi.org/10.2139/ssrn.699222

Paul Pecorino (Contact Author)

University of Alabama - Department of Economics, Finance and Legal Studies ( email )

P.O. Box 870244
Tuscaloosa, AL 35487
United States
205-348-0379 (Phone)
205-348-0590 (Fax)

Akram Temimi

University of Alabama, Tuscaloosa ( email )

Department of Economics, Finance and Legal Studies
P.O. Box 870244
Tuscaloosa, AL 35487
United States
205-348-8961 (Phone)

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