IDEAS home Printed from https://ideas.repec.org/a/eee/pubeco/v120y2014icp231-234.html
   My bibliography  Save this article

The provision point mechanism with refund bonuses

Author

Listed:
  • Zubrickas, Robertas

Abstract

We introduce refund bonuses into the provision point mechanism. If a total contribution is less than the provision point, each contributor receives not only his contribution refunded but also a refund bonus the size of which is proportional to the contribution made. However, because of competition for refund bonuses the provision point is reached in equilibrium. Furthermore, the mechanism can uniquely implement the public good project with Lindahl prices. The mechanism also has other applications.

Suggested Citation

  • Zubrickas, Robertas, 2014. "The provision point mechanism with refund bonuses," Journal of Public Economics, Elsevier, vol. 120(C), pages 231-234.
    • Handle: RePEc:eee:pubeco:v:120:y:2014:i:c:p:231-234
    DOI: 10.1016/j.jpubeco.2014.10.006
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0047272714002205
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jpubeco.2014.10.006?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Palfrey, Thomas R. & Rosenthal, Howard, 1984. "Participation and the provision of discrete public goods: a strategic analysis," Journal of Public Economics, Elsevier, vol. 24(2), pages 171-193, July.
    2. Andreoni,J. & Varian,H., 1999. "Pre-play contracting in the prisoners' dilemma," Working papers 18, Wisconsin Madison - Social Systems.
    3. Martimort, David & Stole, Lars, 2011. "Aggregate Representations of Aggregate Games," MPRA Paper 32871, University Library of Munich, Germany.
    4. Mark Bagnoli & Barton L. Lipman, 1989. "Provision of Public Goods: Fully Implementing the Core through Private Contributions," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 56(4), pages 583-601.
    5. Rose, Steven K. & Clark, Jeremy & Poe, Gregory L. & Rondeau, Daniel & Schulze, William D., 2002. "The private provision of public goods: tests of a provision point mechanism for funding green power programs," Resource and Energy Economics, Elsevier, vol. 24(1-2), pages 131-155, February.
    6. James Andreoni, 1998. "Toward a Theory of Charitable Fund-Raising," Journal of Political Economy, University of Chicago Press, vol. 106(6), pages 1186-1213, December.
    7. Falkinger, Josef, 1996. "Efficient private provision of public goods by rewarding deviations from average," Journal of Public Economics, Elsevier, vol. 62(3), pages 413-422, November.
    8. Martimort, David & Stole, Lars, 2012. "Representing equilibrium aggregates in aggregate games with applications to common agency," Games and Economic Behavior, Elsevier, vol. 76(2), pages 753-772.
    9. Jacob K. Goeree & Emiel Maasland & Sander Onderstal & John L. Turner, 2005. "How (Not) to Raise Money," Journal of Political Economy, University of Chicago Press, vol. 113(4), pages 897-926, August.
    10. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 84(3), pages 488-500.
    11. Varian, Hal R, 1994. "A Solution to the Problem of Externalities When Agents Are Well-Informed," American Economic Review, American Economic Association, vol. 84(5), pages 1278-1293, December.
    12. Chen, Yan, 2008. "Incentive-compatible Mechanisms for Pure Public Goods: A Survey of Experimental Research," Handbook of Experimental Economics Results, in: Charles R. Plott & Vernon L. Smith (ed.), Handbook of Experimental Economics Results, edition 1, volume 1, chapter 67, pages 625-643, Elsevier.
    13. repec:hal:pseose:hal-00813181 is not listed on IDEAS
    14. Dilip Mookherjee & Stefan Reichelstein, 1990. "Implementation via Augmented Revelation Mechanisms," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 57(3), pages 453-475.
    15. Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680.
    16. Cadsby, Charles Bram & Maynes, Elizabeth, 1999. "Voluntary provision of threshold public goods with continuous contributions: experimental evidence," Journal of Public Economics, Elsevier, vol. 71(1), pages 53-73, January.
    17. Tabarrok, Alexander, 1998. "The Private Provision of Public Goods via Dominant Assurance Contracts," Public Choice, Springer, vol. 96(3-4), pages 345-362, September.
    18. John Morgan, 2000. "Financing Public Goods by Means of Lotteries," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 67(4), pages 761-784.
    19. R. Isaac & David Schmidtz & James Walker, 1989. "The assurance problem in a laboratory market," Public Choice, Springer, vol. 62(3), pages 217-236, September.
    20. Robertas Zubrickas, 2013. "The provision point mechanism with reward money," ECON - Working Papers 114, Department of Economics - University of Zurich, revised Oct 2013.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Cason, Timothy N. & Tabarrok, Alex & Zubrickas, Robertas, 2021. "Early refund bonuses increase successful crowdfunding," Games and Economic Behavior, Elsevier, vol. 129(C), pages 78-95.
    2. Mun, Se-il, 2019. "Joint provision of transportation infrastructure," Economics of Transportation, Elsevier, vol. 19(C), pages 1-1.
    3. Lattimer, Timothy R.B. & Zubrickas, Robertas, 2023. "Refund bonuses and revenue equivalence," Economics Letters, Elsevier, vol. 231(C).
    4. Erik Ansink & Mark Koetse & Jetske Bouma & Dominic Hauck & Daan van Soest, 2022. "Crowdfunding Conservation (and Other Public Goods)," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 9(3), pages 565-602.
    5. Haris Aziz & Sujit Gujar & Manisha Padala & Mashbat Suzuki & Jeremy Vollen, 2022. "Coordinating Monetary Contributions in Participatory Budgeting," Papers 2206.05966, arXiv.org, revised Feb 2023.
    6. Li, Zhi & Liu, Pengfei & Swallow, Stephen K., 2017. "Supporting Private Provision of Ecosystem Services through Contracts: Evidence from Lab and Field Experiments," 2018 Allied Social Sciences Association (ASSA) Annual Meeting, January 5-7, 2018, Philadelphia, Pennsylvania 266300, Agricultural and Applied Economics Association.
    7. Timothy N. Cason & Alex Tabarrok & Robertas Zubrickas, 2024. "Signaling Quality: How Refund Bonsues Can Overcome Information Asymmetries in Crowdfunding," Purdue University Economics Working Papers 1339, Purdue University, Department of Economics.
    8. 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.
    9. Se-il Mun, 2016. "Joint Provision of International Transport Infrastructure," Discussion papers e-15-015, Graduate School of Economics , Kyoto University.
    10. Zhi Li & Pengfei Liu & Stephen K. Swallow, 2021. "Assurance Contracts to Support Multi-Unit Threshold Public Goods in Environmental Markets," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 80(2), pages 339-378, October.
    11. Molina, Renato & Costello, Christopher & Kaffine, Daniel, 2024. "Sharing and expanding the co-benefits of conservation," Ecological Economics, Elsevier, vol. 218(C).
    12. Cason, Timothy N. & Zubrickas, Robertas, 2017. "Enhancing fundraising with refund bonuses," Games and Economic Behavior, Elsevier, vol. 101(C), pages 218-233.
    13. Cherchye, Laurens & Demuynck, Thomas & De Rock, Bram & Freer, Mikhail, 2022. "Revealed preference analysis of expected utility maximization under prize-probability trade-offs," Journal of Mathematical Economics, Elsevier, vol. 99(C).
    14. Robertas Zubrickas, 2020. "Contingent wage subsidy," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 22(4), pages 1105-1119, August.
    15. Cason, Timothy N. & Zubrickas, Robertas, 2019. "Donation-based crowdfunding with refund bonuses," European Economic Review, Elsevier, vol. 119(C), pages 452-471.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Robertas Zubrickas, 2013. "The provision point mechanism with reward money," ECON - Working Papers 114, Department of Economics - University of Zurich, revised Oct 2013.
    2. Cason, Timothy N. & Zubrickas, Robertas, 2017. "Enhancing fundraising with refund bonuses," Games and Economic Behavior, Elsevier, vol. 101(C), pages 218-233.
    3. Cason, Timothy N. & Tabarrok, Alex & Zubrickas, Robertas, 2021. "Early refund bonuses increase successful crowdfunding," Games and Economic Behavior, Elsevier, vol. 129(C), pages 78-95.
    4. Cason, Timothy N. & Zubrickas, Robertas, 2019. "Donation-based crowdfunding with refund bonuses," European Economic Review, Elsevier, vol. 119(C), pages 452-471.
    5. Bose, Bijetri & Rabotyagov, Sergey, 2018. "Provision of public goods using a combination of lottery and a provision point," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 73(C), pages 99-115.
    6. Erik Ansink & Mark Koetse & Jetske Bouma & Dominic Hauck & Daan van Soest, 2022. "Crowdfunding Conservation (and Other Public Goods)," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 9(3), pages 565-602.
    7. Menezes, Flavio M. & Monteiro, Paulo K. & Temimi, Akram, 2001. "Private provision of discrete public goods with incomplete information," Journal of Mathematical Economics, Elsevier, vol. 35(4), pages 493-514, July.
    8. Bougherara, Douadia & Denant-Boemont, Laurent & Masclet, David, 2011. "Cooperation and framing effects in provision point mechanisms: Experimental evidence," Ecological Economics, Elsevier, vol. 70(6), pages 1200-1210, April.
    9. Boadway, Robin & Song, Zhen & Tremblay, Jean-Francois, 2007. "Commitment and matching contributions to public goods," Journal of Public Economics, Elsevier, vol. 91(9), pages 1664-1683, September.
    10. Rose, Steven K. & Clark, Jeremy & Poe, Gregory L. & Rondeau, Daniel & Schulze, William D., 2002. "The private provision of public goods: tests of a provision point mechanism for funding green power programs," Resource and Energy Economics, Elsevier, vol. 24(1-2), pages 131-155, February.
    11. 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.
    12. Spencer, Michael A. & Swallow, Stephen K. & Shogren, Jason F. & List, John A., 2009. "Rebate rules in threshold public good provision," Journal of Public Economics, Elsevier, vol. 93(5-6), pages 798-806, June.
    13. Francesco Bripi & Daniela Grieco, 2023. "Participatory incentives," Experimental Economics, Springer;Economic Science Association, vol. 26(4), pages 813-849, September.
    14. Yan Chen & Robert Gazzale, 2004. "When Does Learning in Games Generate Convergence to Nash Equilibria? The Role of Supermodularity in an Experimental Setting," American Economic Review, American Economic Association, vol. 94(5), pages 1505-1535, December.
    15. Federica Alberti & Anna Cartwright & Edward Cartwright, 2021. "Predicting Efficiency in Threshold Public Good Games: A Learning Direction Theory Approach," Working Papers in Economics & Finance 2021-01, University of Portsmouth, Portsmouth Business School, Economics and Finance Subject Group.
    16. Matthew Donazzan & Nisvan Erkal & Boon Han Koh, 2016. "Impact of Rebates and Refunds on Contributions to Threshold Public Goods: Evidence from a Field Experiment," Southern Economic Journal, John Wiley & Sons, vol. 83(1), pages 69-86, July.
    17. Anauati, María Victoria & Feld, Brian & Galiani, Sebastian & Torrens, Gustavo, 2016. "Collective action: Experimental evidence," Games and Economic Behavior, Elsevier, vol. 99(C), pages 36-55.
    18. Julian Rauchdobler & Rupert Sausgruber & Jean-Robert Tyran, 2010. "Voting on Thresholds for Public Goods: Experimental Evidence," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 66(1), pages 34-64, March.
    19. Feige, Christian, 2015. "Success rates in simplified threshold public goods games: A theoretical model," Working Paper Series in Economics 70, Karlsruhe Institute of Technology (KIT), Department of Economics and Management.
    20. Corazzini, Luca & Cotton, Christopher & Valbonesi, Paola, 2015. "Donor coordination in project funding: Evidence from a threshold public goods experiment," Journal of Public Economics, Elsevier, vol. 128(C), pages 16-29.

    More about this item

    Keywords

    Public goods; Provision point mechanism; Refund bonus; Distributional efficiency;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:pubeco:v:120:y:2014:i:c:p:231-234. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/505578 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.