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A note on contribution games with loss functions

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  • Russo, Giuseppe
  • Senatore, Luigi

Abstract

Decisions on joint funding of continuous public goods between two agents often involve heterogeneous targets. We introduce loss functions in a contribution game in order to study the effect of this conflict. Unlike Varian (1994), joint contribution occurs only if the players’ targets are sufficiently close and the sequential game reduces free riding problems, while total contribution is higher in the simultaneous game.

Suggested Citation

  • Russo, Giuseppe & Senatore, Luigi, 2012. "A note on contribution games with loss functions," Economics Letters, Elsevier, vol. 115(2), pages 211-214.
    • Handle: RePEc:eee:ecolet:v:115:y:2012:i:2:p:211-214
    DOI: 10.1016/j.econlet.2011.12.029
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    1. Giuseppe Russo & Luigi Senatore, 2013. "Who contributes? A strategic approach to a European immigration policy," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-16, December.

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    More about this item

    Keywords

    Public goods; Intergovernmental relations; Noncooperative games;
    All these keywords.

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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