Contributing or free-riding? Voluntary participation in a public good economy

Taiji Furusawa, Hideo Konishi
2011 Theoretical Economics  
We consider a (pure) public goods provision problem with voluntary participation in a quasi-linear economy. We propose a new hybrid solution concept, the free-riding-proof core (FRP-Core), which endogenously determines a contribution group, public goods provision level, and how to share the provision costs. The FRP-Core is always nonempty in public goods economies but does not usually achieve global efficiency. The FRP-Core has support from both cooperative and noncooperative games. In
more » ... r, it is equivalent to the set of perfectly coalition-proof Nash equilibria (Bernheim, Peleg, and Whinston, 1987) of a dynamic game with players' participation decisions followed by a common agency game of public goods provision. the participants of the seminar at RIETI and many other seminars and workshops/conferences for their comments. Hideo Konishi thanks Kyoto Institute of Economic Research for providing an excellent research environment. All remaining errors are, of course, our own.
doi:10.3982/te567 fatcat:enxzfff5wjc7hmhif6pbrv46ce