The Important Thing Is not (Always) Winning but Taking Part: Funding Public Goods with Contests

No 102, Working Papers from University of Milano-Bicocca, Department of Economics

Abstract: This paper considers a public good game with incomplete information a?ected by extreme free-riding. We overcome this problem through the implementation of a contest in which several prizes can be awarded. For any possible distribution of wealth we identify the necessary and su?cient conditions for the equilibrium allocations to be interior for all players. At interior solutions, it is optimal for the social planner to set the last prize equal to zero, but otherwise the total expected welfare is independent of the distribution of the total prize sum among the prizes. We prove that private provision via a contest Pareto-dominates both public provision and private provision via a lottery.

Pages: 22 pages
Date: 2006-11, Revised 2006-11
New Economics Papers: this item is included in nep-pbe
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Citations: View citations in EconPapers (2)

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http://repec.dems.unimib.it/repec/pdf/mibwpaper102.pdf First version, 2006 (application/pdf)

Related works:
Journal Article: The Important Thing Is Not (Always) Winning but Taking Part: Funding Public Goods with Contests (2011)
Working Paper: The Important Thing is not (Always) Winning but Taking Part: Funding Public Goods with Contests (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:mib:wpaper:102

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