Full agreement and the provision of threshold public goods

Federica Alberti, Edward J. Cartwright

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    Abstract

    The experimental evidence suggests that groups are inefficient at providing threshold public goods. This inefficiency appears to reflect an inability to coordinate over how to distribute the cost of providing the good. So, why do groups not just split the cost equally? We offer an answer to this question by demonstrating that in a standard threshold public good game there is no collectively rational recommendation. We also demonstrate that if full agreement is required in order to provide the public good then there is a collectively rational recommendation, namely, to split the cost equally. Requiring full agreement may, therefore, increase efficiency in providing threshold public goods. We test this hypothesis experimentally and find support for it.
    Original languageEnglish
    Pages (from-to)205-233
    JournalPublic Choice
    Volume166
    Issue number1
    Early online date1 Mar 2016
    DOIs
    Publication statusPublished - Mar 2016

    Keywords

    • Public good
    • threshold
    • full agreement
    • focal point
    • experiment
    • coordination

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