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Enhancing Voluntary Contribution in a Public Goods Economy via a Minimum Individual Contribution Level

Author

Listed:
  • Michela Chessa

    (Université Côte d'Azur, France
    GREDEG CNRS)

  • Patrick Loiseau

    (EURECOM
    Max Planck Institute for Software Systems (MPI-SWS))

Abstract

We consider the problem of increasing the total level of contribution in a public goods economy modeled as a non-linear public goods game. We propose a simple intervention that restricts the individuals strategy sets by imposing a minimum individual contribution level (while still allowing free-riding); and we investigate theoretically the potential of this intervention as a mechanism design tool. In particular we show that, for a well-chosen value of the minimum individual contribution level, our intervention does not incentivize any free-riding and strictly increases the total contribution level—compared to voluntary contributions—at a unique potential maximizer equilibrium. This is appealing because such a non-intrusive intervention is easily implementable in many different settings where normative or monetary interventions have met little acceptance. We present a motivating application in the domain of information economics about contribution of personal data to a data analytics project.

Suggested Citation

  • Michela Chessa & Patrick Loiseau, 2017. "Enhancing Voluntary Contribution in a Public Goods Economy via a Minimum Individual Contribution Level," GREDEG Working Papers 2017-24, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France, revised Feb 2023.
    • Handle: RePEc:gre:wpaper:2017-24
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    References listed on IDEAS

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    More about this item

    Keywords

    Public goods; Voluntary contribution; Potential maximizer Nash equilibria; Minimum contribution level; Privacy;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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