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Overcoming problems of coordination and freeriding in a game with multiple public goods: dynamic contribution with information provision

Author

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  • Ai Takeuchi

    (Ritsumeikan University)

  • Erika Seki

    (Osaka University)

Abstract

This study analyzes the role of information in overcoming the twin problems of freeriding and coordination failure that arise in the provision of social services with multiplicity and diminishing marginal return. We consider a model with two public goods, each of which has a threshold of effective contribution such that any costly contributions beyond the threshold generate no benefit. We analyze whether the provision of information on the threshold, which represents the need for contributions to social services, helps improve efficiency. The theoretical analyses predict that information provision enables prosocial individuals to match the thresholds, thus improving outcome efficiency. The experimental analyses confirm this prediction under a dynamic contribution system: the information on thresholds, together with the real-time update of cumulative contributions, promotes the efficient provision of multiple public goods. However, the analysis of contribution timings reveals a side effect of such information: it causes more freeriding when the need is small.

Suggested Citation

  • Ai Takeuchi & Erika Seki, 2023. "Overcoming problems of coordination and freeriding in a game with multiple public goods: dynamic contribution with information provision," The Japanese Economic Review, Springer, vol. 74(3), pages 379-411, July.
    • Handle: RePEc:spr:jecrev:v:74:y:2023:i:3:d:10.1007_s42973-023-00133-6
    DOI: 10.1007/s42973-023-00133-6
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    More about this item

    Keywords

    Charity; Freeriding; Coordination; Multiple public goods; Experiment; Information;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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