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Collective Goods, Common Agency, and Third‐Party Intervention

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  • Kevin Siqueira
  • Todd Sandler

Abstract

Voluntary contributions to multiple public goods may involve many contributors (principals) who condition their payments to a single provider (agent) based on realized provision. If the agent's efforts on these goods are unobservable, then a common agency problem results with a third‐best outcome owing to agency costs, free riding, and competitive interests. The latter manifests itself in the principals punishing the agent for providing an alternative public good (for which they have no interest) to a different set of principals. Remedies may require multiple policy instruments unlike the standard prescription for the public good or common agency problem in isolation. Moreover, the sequence of actions is essential for addressing the combined problems.

Suggested Citation

  • Kevin Siqueira & Todd Sandler, 2004. "Collective Goods, Common Agency, and Third‐Party Intervention," Bulletin of Economic Research, Wiley Blackwell, vol. 56(1), pages 1-20, January.
    • Handle: RePEc:bla:buecrs:v:56:y:2004:i:1:p:1-20
    DOI: 10.1111/j.1467-8586.2004.00185.x
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    References listed on IDEAS

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    Cited by:

    1. Graham Mallard, 2014. "Static Common Agency And Political Influence: An Evaluative Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 28(1), pages 17-35, February.
    2. Zuleta, Hernando & Villaveces, Marta Juanita & Andonova, Veneta, 2013. "Conflict and negotiation in Colombia: Are pre-donations useful?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 47(C), pages 105-117.
    3. SIQUEIRA, Kevin & SANDLER, Todd & CAULEY, Jon, 2009. "Common agency and state-owned enterprise reform," China Economic Review, Elsevier, vol. 20(2), pages 208-217, June.

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