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Private provision of public goods under price uncertainty: a comment

Author

Listed:
  • Etienne Billette de Villemeur

    (Université de Lille
    Lille Economics Management)

  • Sebastián Cea-Echenique

    (Universidad de los Andes, Chile, Facultad de Ingeniería y Ciencias Aplicadas)

  • Conrado Cuevas

    (INCAE)

Abstract

We revise a result stating that there is a positive relationship between contributions and welfare in a public good provision game under price uncertainty (Gradstein et al. Soc Choice Welf 10(4):371–382, 1993). The authors state in Proposition 3 that welfare decreases when price uncertainty induces a reduction in private contributions. By contrast, we show that, under certain conditions, a reduction in contributions can be associated with an improvement in consumer welfare. This result is important because public policy regarding the provision of public goods is often based on indicators such as citizen participation, which, as this note shows, may constitute a misleading signal.

Suggested Citation

  • Etienne Billette de Villemeur & Sebastián Cea-Echenique & Conrado Cuevas, 2024. "Private provision of public goods under price uncertainty: a comment," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 63(1), pages 171-177, August.
    • Handle: RePEc:spr:sochwe:v:63:y:2024:i:1:d:10.1007_s00355-024-01526-1
    DOI: 10.1007/s00355-024-01526-1
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