Private provision of a discrete public good with uncertain cost

Shmuel Nitzan, Richard E. Romano

Research output: Contribution to journalArticlepeer-review

35 Scopus citations

Abstract

It is known that a discrete public good is efficiently provided in the subset of 'undominated equilibria' (those not Pareto dominated within the set of Nash equilibria). We make the cost of the discrete public good uncertain at the time the contribution game is played. This can lead to strikingly different results. Often, the public good is underprovided in any Nash equilibrium and there is a unique undominated equilibrium. These results hold for some distributions when there is arbitrarily little uncertainty and always when there is enough uncertainty.

Original languageEnglish
Pages (from-to)357-370
Number of pages14
JournalJournal of Public Economics
Volume42
Issue number3
DOIs
StatePublished - Aug 1990

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