The important thing is not (always) winning but taking part: Funding public goods with contests

Faravelli, Marco (2011) The important thing is not (always) winning but taking part: Funding public goods with contests. Journal of Public Economic Theory, 13 1: 1-22. doi:10.1111/j.1467-9779.2010.01490.x

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Author Faravelli, Marco
Title The important thing is not (always) winning but taking part: Funding public goods with contests
Journal name Journal of Public Economic Theory   Check publisher's open access policy
ISSN 1097-3923
1467-9779
Publication date 2011-02
Sub-type Article (original research)
DOI 10.1111/j.1467-9779.2010.01490.x
Open Access Status
Volume 13
Issue 1
Start page 1
End page 22
Total pages 22
Place of publication Hoboken, NJ, United States
Publisher Wiley-Blackwell Publishing
Collection year 2012
Language eng
Abstract This paper considers a public good game with heterogeneous endowments and incomplete information affected by extreme free riding. I overcome this problem through the implementation of a deterministic contest in which several prizes may be awarded. I identify a monotone equilibrium, in which the contribution is strictly increasing in the endowment. I prove that it is optimal for the social planner to set the last prize equal to zero, but otherwise total expected contribution is invariant to the prize structure. Finally, I show that private provision via a contest Pareto-dominates public provision and is higher than the total contribution raised through a lottery.
Q-Index Code C1
Q-Index Status Confirmed Code
Institutional Status UQ
Additional Notes Published online: 6 January, 2011.

Document type: Journal Article
Sub-type: Article (original research)
Collections: Official 2012 Collection
School of Economics Publications
 
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Created: Tue, 25 Jan 2011, 14:10:12 EST by Alys Hohnen on behalf of School of Economics