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Stackelberg leadership and transfers in private provision of public goods

Author

Listed:
  • (*), Kai A. Konrad

    (Department of Economics, Freie UniversitÄt Berlin, Boltzmannstrasse 20, D-14195 Berlin, Germany)

  • Wolfgang Buchholz

    (Department of Economics, UniversitÄt Regensburg, D-93040 Regensburg, Germany)

  • Kjell Erik Lommerud

    (Department of Economics, Universitetet i Bergen, Fosswinckels gate 6, N-5007 Bergen, Norway)

Abstract

We consider transfers in a Stackelberg game of private provision of a public good. It turns out that the agent who is the follower in the process of making voluntary contributions to a public good may have an incentive to make monetary transfers to the Stackelberg leader even in a situation where neither has a comparative advantage in making contributions to the public good. The Stackelberg leader is willing to accept such transfers if the actual contribution game is fully non-cooperative because the transfer generates a Pareto superior outcome. If the contributions in the Stackelberg equilibrium is the threat point of a possible cooperative Nash bargaining game, the Stackelberg leader will refuse to accept the transfer if she can.

Suggested Citation

  • (*), Kai A. Konrad & Wolfgang Buchholz & Kjell Erik Lommerud, 1997. "Stackelberg leadership and transfers in private provision of public goods," Review of Economic Design, Springer;Society for Economic Design, vol. 3(1), pages 29-43.
    • Handle: RePEc:spr:reecde:v:3:y:1997:i:1:p:29-43
    Note: Received: 30 June 1995 / Accepted: 18 February 1997
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    Cited by:

    1. Vicary, Simon & Sandler, Todd, 2002. "Weakest-link public goods: Giving in-kind or transferring money," European Economic Review, Elsevier, vol. 46(8), pages 1501-1520, September.
    2. Matthew O. Jackson & Simon Wilkie, 2005. "Endogenous Games and Mechanisms: Side Payments Among Players," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 72(2), pages 543-566.
    3. Andreas Löschel & Dirk Rübbelke, 2014. "On the Voluntary Provision of International Public Goods," Economica, London School of Economics and Political Science, vol. 81(322), pages 195-204, April.
    4. Clemens Puppe & Rudolf Kerschbamer, 2001. "Sequential contributions to public goods: on the structure of the equilibrium set," Economics Bulletin, AccessEcon, vol. 8(3), pages 1-7.
    5. Miriam Beblo & Julio Robledo, 2008. "The wage gap and the leisure gap for double-earner couples," Journal of Population Economics, Springer;European Society for Population Economics, vol. 21(2), pages 281-304, April.
    6. Andaluz, Joaquín & Marcén, Miriam & Molina, José Alberto, 2008. "Dynamics of Intrahousehold Bargaining," IZA Discussion Papers 3757, Institute of Labor Economics (IZA).
    7. Russo, Giuseppe & Senatore, Luigi, 2012. "A note on contribution games with loss functions," Economics Letters, Elsevier, vol. 115(2), pages 211-214.
    8. Richard Cornes & Roger Hartley, 2007. "Aggregative Public Good Games," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 9(2), pages 201-219, April.
    9. Kessing, Sebastian Georg, 2003. "Delay in joint projects [Verzögerung bei gemeinsamen Projekten]," Discussion Papers, Research Unit: Market Processes and Governance SP II 2003-15, WZB Berlin Social Science Center.
    10. Wolfgang Buchholz & Michael Eichenseer, 2019. "Advantageous leadership in public good provision: the case of an endogenous contribution technology," Journal of Economics, Springer, vol. 126(1), pages 1-17, January.
    11. Keisuke Hattori & Mai Yamada, 2020. "Effective Leadership Selection in Complementary Teams," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 176(4), pages 620-639.
    12. Rudolf Kerschbamer & Clemens Puppe, 1998. "Voluntary contributions when the public good is not necessarily normal," Journal of Economics, Springer, vol. 68(2), pages 175-192, June.
    13. Senatore, L, 2011. "Public Good Provision with Convex Costs," MPRA Paper 36984, University Library of Munich, Germany.
    14. Miriam Beblo & Julio Robledo, 2008. "The wage gap and the leisure gap for double-earner couples," Journal of Population Economics, Springer;European Society for Population Economics, vol. 21(2), pages 281-304, April.

    More about this item

    Keywords

    Voluntary provision of public goods; Stackelberg games;

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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