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Profit-Maximizing Sale of a Discrete Public Good via the Subscription Game in Private-Information Environments

Author

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  • Barbieri Stefano

    (Tulane University, sbarbier@tulane.edu)

  • Malueg David A.

    (University of California - Riverside, david.malueg@ucr.edu)

Abstract

We analyze a symmetric Bayesian game in which two players individually contribute to fund a discrete public good; contributions are refunded if they do not reach a threshold set by the seller of the good. We characterize the distributions of players' private values that can support a symmetric equilibrium in continuous piecewise-linear strategies, and we calculate these strategies. Allowing the seller to charge an entry fee before players make their private contributions, we show these piecewise-linear equilibrium strategies maximize the seller's expected profit over all incentive compatible selling mechanisms.

Suggested Citation

  • Barbieri Stefano & Malueg David A., 2010. "Profit-Maximizing Sale of a Discrete Public Good via the Subscription Game in Private-Information Environments," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 10(1), pages 1-31, February.
    • Handle: RePEc:bpj:bejtec:v:10:y:2010:i:1:n:5
    DOI: 10.2202/1935-1704.1575
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Murat Yilmaz, 2010. "Auctioning a Discrete Public Good under Incomplete Information," Working Papers 2010/14, Bogazici University, Department of Economics.
    2. Li, Zhi & Anderson, Christopher M. & Swallow, Stephen, 2012. "Uniform Price Mechanisms for Threshold Public Goods Provision: An Experimental Investigation," Working Paper series 148349, University of Connecticut, Charles J. Zwick Center for Food and Resource Policy.
    3. Altınok, Ahmet & Yılmaz, Murat, 2018. "Dynamic voluntary contribution to a public project under time inconsistency," Journal of Economic Behavior & Organization, Elsevier, vol. 145(C), pages 114-140.
    4. Ellman, Matthew & Hurkens, Sjaak, 2019. "Optimal crowdfunding design," Journal of Economic Theory, Elsevier, vol. 184(C).
    5. Roland Strausz, 2017. "A Theory of Crowdfunding: A Mechanism Design Approach with Demand Uncertainty and Moral Hazard," American Economic Review, American Economic Association, vol. 107(6), pages 1430-1476, June.
    6. Li, Zhi & Anderson, Christopher M. & Swallow, Stephen K., 2016. "Uniform price mechanisms for threshold public goods provision with complete information: An experimental investigation," Journal of Public Economics, Elsevier, vol. 144(C), pages 14-26.
    7. Zhi Li & Dongsheng Chen & Pengfei Liu, 2023. "Assurance payments on the coordination of threshold public goods provision: An experimental investigation," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 25(2), pages 407-436, April.
    8. Zhi Li & Christopher Anderson & Stephen K. Swallow, 2012. "Uniform Price Mechanisms for Threshold Public Goods Provision: An Experimental Investigation," Working Papers 14, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.

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