IDEAS home Printed from https://ideas.repec.org/p/osk/wpaper/1915r.html
   My bibliography  Save this paper

Coordination and free-riding problems in the provision of multiple public goods

Author

Listed:
  • Ai Takeuchi

    (College of Economics, Ritsumeikan University)

  • Erika Seki

    (Graduate School of Economics, Osaka University)

Abstract

This study considers the twin problems of free riding and coordination failure prevailing in the provision of multiple public goods with diminishing marginal returns in which the payoff-sum maximising Pareto optimal outcome requires less-than-full contributions by group members. We examine theoretically and experimentally whether the provision of information on the demand for public goods helps overcome these problems and improves efficiency. We construct a game of two public goods,each with an upper bound on effective contributions. Theoretical analysis predicts that this information improves efficiency as it prompts efficiency concerned individuals to match the upper bound of each public good in equilibrium.The experimental results show countervailing effects of demand information,i.e.,it improves coordination but deteriorates the free-riding problem.

Suggested Citation

  • Ai Takeuchi & Erika Seki, 2020. "Coordination and free-riding problems in the provision of multiple public goods," Discussion Papers in Economics and Business 19-15-Rev., Osaka University, Graduate School of Economics.
    • Handle: RePEc:osk:wpaper:1915r
    as

    Download full text from publisher

    File URL: http://www2.econ.osaka-u.ac.jp/econ_society/dp/1915R.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Ramalingam, Abhijit & Stoddard, Brock V. & Walker, James M., 2019. "The market for talent: Competition for resources and self-governance in teams," Games and Economic Behavior, Elsevier, vol. 114(C), pages 268-284.
    2. Neugebauer, Tibor & Perote, Javier & Schmidt, Ulrich & Loos, Malte, 2009. "Selfish-biased conditional cooperation: On the decline of contributions in repeated public goods experiments," Journal of Economic Psychology, Elsevier, vol. 30(1), pages 52-60, February.
    3. Van Huyck, John B & Battalio, Raymond C & Beil, Richard O, 1990. "Tacit Coordination Games, Strategic Uncertainty, and Coordination Failure," American Economic Review, American Economic Association, vol. 80(1), pages 234-248, March.
    4. Luigi Butera & Philip Grossman & Daniel Houser & John List & Marie-Claire Villeval, 2020. "A New Mechanism to Alleviate the Crises of Confidence in Science - With an Application to the Public Goods Game," Artefactual Field Experiments 00684, The Field Experiments Website.
    5. Rachel T. A. Croson, 2007. "Theories Of Commitment, Altruism And Reciprocity: Evidence From Linear Public Goods Games," Economic Inquiry, Western Economic Association International, vol. 45(2), pages 199-216, April.
    6. Fischbacher, Urs & Gachter, Simon & Fehr, Ernst, 2001. "Are people conditionally cooperative? Evidence from a public goods experiment," Economics Letters, Elsevier, vol. 71(3), pages 397-404, June.
    7. Bagnoli, Mark & Ben-David, Shaul & McKee, Michael, 1992. "Voluntary provision of public goods : The multiple unit case," Journal of Public Economics, Elsevier, vol. 47(1), pages 85-106, February.
    8. Thomas Dohmen & Armin Falk & David Huffman & Uwe Sunde & Jürgen Schupp & Gert G. Wagner, 2011. "Individual Risk Attitudes: Measurement, Determinants, And Behavioral Consequences," Journal of the European Economic Association, European Economic Association, vol. 9(3), pages 522-550, June.
    9. Luca Corazzini & Christopher Cotton & Tommaso Reggiani, 2020. "Delegation and coordination with multiple threshold public goods: experimental evidence," Experimental Economics, Springer;Economic Science Association, vol. 23(4), pages 1030-1068, December.
    10. repec:cup:judgdm:v:6:y:2011:i:8:p:771-781 is not listed on IDEAS
    11. Brock V Stoddard, 2015. "Probabilistic Production of a Public Good," Economics Bulletin, AccessEcon, vol. 35(1), pages 37-52.
    12. Mark Isaac, R. & McCue, Kenneth F. & Plott, Charles R., 1985. "Public goods provision in an experimental environment," Journal of Public Economics, Elsevier, vol. 26(1), pages 51-74, February.
    13. Selten, R. & Chmura, T. & Pitz, T. & Kube, S. & Schreckenberg, M., 2007. "Commuters route choice behaviour," Games and Economic Behavior, Elsevier, vol. 58(2), pages 394-406, February.
    14. Luigi Butera & John List, 2017. "An Economic Approach to Alleviate the Crisis of Confidence in Science: With an Application to the Public Goods Game," Artefactual Field Experiments 00608, The Field Experiments Website.
    15. Urs Fischbacher & Simon Gachter, 2010. "Social Preferences, Beliefs, and the Dynamics of Free Riding in Public Goods Experiments," American Economic Review, American Economic Association, vol. 100(1), pages 541-556, March.
    16. 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.
    17. Charles A. Holt & Susan K. Laury, 2002. "Risk Aversion and Incentive Effects," American Economic Review, American Economic Association, vol. 92(5), pages 1644-1655, December.
    18. Kocher, Martin G. & Cherry, Todd & Kroll, Stephan & Netzer, Robert J. & Sutter, Matthias, 2008. "Conditional cooperation on three continents," Economics Letters, Elsevier, vol. 101(3), pages 175-178, December.
    19. Dorsey, Robert E, 1992. "The Voluntary Contributions Mechanism with Real Time Revisions," Public Choice, Springer, vol. 73(3), pages 261-282, April.
    20. Fellner, Gerlinde & Lünser, Gabriele K., 2014. "Cooperation in local and global groups," Journal of Economic Behavior & Organization, Elsevier, vol. 108(C), pages 364-373.
    21. Blackwell, Calvin & McKee, Michael, 2003. "Only for my own neighborhood?: Preferences and voluntary provision of local and global public goods," Journal of Economic Behavior & Organization, Elsevier, vol. 52(1), pages 115-131, September.
    22. Murphy, Ryan O. & Ackermann, Kurt A. & Handgraaf, Michel J. J., 2011. "Measuring Social Value Orientation," Judgment and Decision Making, Cambridge University Press, vol. 6(8), pages 771-781, December.
    23. Matthew McCarter & Anya Samek & Roman Sheremeta, 2014. "Divided Loyalists or Conditional Cooperators? Creating Consensus About Cooperation in Multiple Simultaneous Social Dilemmas," Artefactual Field Experiments 00441, The Field Experiments Website.
    24. Vincent Théroude & Adam Zylbersztejn, 2020. "Cooperation in a risky world," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 22(2), pages 388-407, April.
    25. Caleb A. Cox & Brock Stoddard, 2021. "Common-Value Public Goods and Informational Social Dilemmas," American Economic Journal: Microeconomics, American Economic Association, vol. 13(2), pages 343-369, May.
    26. Laury, Susan K. & Holt, Charles A., 2008. "Voluntary Provision of Public Goods: Experimental Results with Interior Nash Equilibria," Handbook of Experimental Economics Results, in: Charles R. Plott & Vernon L. Smith (ed.), Handbook of Experimental Economics Results, edition 1, volume 1, chapter 84, pages 792-801, Elsevier.
    27. Lata Gangadharan & Veronika Nemes, 2009. "Experimental Analysis Of Risk And Uncertainty In Provisioning Private And Public Goods," Economic Inquiry, Western Economic Association International, vol. 47(1), pages 146-164, January.
    28. Schram, Arthur & Offerman, Theo & Sonnemans, Joep, 2008. "Explaining the Comparative Statics in Step-Level Public Good Games," Handbook of Experimental Economics Results, in: Charles R. Plott & Vernon L. Smith (ed.), Handbook of Experimental Economics Results, edition 1, volume 1, chapter 86, pages 817-824, Elsevier.
    29. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer;Economic Science Association, vol. 10(2), pages 171-178, June.
    30. Bernasconi, Michele & Corazzini, Luca & Kube, Sebastian & Maréchal, Michel André, 2009. "Two are better than one!: Individuals' contributions to "unpacked" public goods," Economics Letters, Elsevier, vol. 104(1), pages 31-33, July.
    31. Marks, Melanie B & Croson, Rachel T A, 1999. "The Effect of Incomplete Information in a Threshold Public Goods Experiment," Public Choice, Springer, vol. 99(1-2), pages 103-118, April.
    32. Florian Engl & Arno Riedl & Roberto Weber, 2021. "Spillover Effects of Institutions on Cooperative Behavior, Preferences, and Beliefs," American Economic Journal: Microeconomics, American Economic Association, vol. 13(4), pages 261-299, November.
    33. Vincent Théroude & Adam Zylbersztejn, 2017. "Cooperation in a risky world," Working Papers halshs-01443917, HAL.
    34. Robert Slonim & Carmen Wang & Ellen Garbarino, 2014. "The Market for Blood," Journal of Economic Perspectives, American Economic Association, vol. 28(2), pages 177-196, Spring.
    35. Marks, Melanie & Croson, Rachel, 1998. "Alternative rebate rules in the provision of a threshold public good: An experimental investigation," Journal of Public Economics, Elsevier, vol. 67(2), pages 195-220, February.
    36. Ananish Chaudhuri, 2011. "Sustaining cooperation in laboratory public goods experiments: a selective survey of the literature," Experimental Economics, Springer;Economic Science Association, vol. 14(1), pages 47-83, March.
    37. Dickinson, David L., 1998. "The voluntary contributions mechanism with uncertain group payoffs," Journal of Economic Behavior & Organization, Elsevier, vol. 35(4), pages 517-533, May.
    38. Feng, Jun & Saijo, Tatsuyoshi & Shen, Junyi & Qin, Xiangdong, 2018. "Instability in the voluntary contribution mechanism with a quasi-linear payoff function: An experimental analysis," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 72(C), pages 67-77.
    39. M. Levati & Andrea Morone & Annamaria Fiore, 2009. "Voluntary contributions with imperfect information: An experimental study," Public Choice, Springer, vol. 138(1), pages 199-216, January.
    40. Luigi Butera & Philip J Grossman & Daniel Houser & John A List & Marie Claire Villeval, 2020. "A New Mechanism to Alleviate the Crises of Confidence in Science With An Application to the Public Goods GameA Review," Working Papers halshs-02512932, HAL.
    41. Chan, Nathan W. & Wolk, Leonard, 2020. "Cost-effective giving with multiple public goods," Journal of Economic Behavior & Organization, Elsevier, vol. 173(C), pages 130-145.
    42. Palfrey, Thomas & Rosenthal, Howard & Roy, Nilanjan, 2017. "How cheap talk enhances efficiency in threshold public goods games," Games and Economic Behavior, Elsevier, vol. 101(C), pages 234-259.
    43. Erik Snowberg & Leeat Yariv, 2021. "Testing the Waters: Behavior across Participant Pools," American Economic Review, American Economic Association, vol. 111(2), pages 687-719, February.
    44. Armin Falk & Urs Fischbacher & Simon Gächter, 2013. "Living In Two Neighborhoods—Social Interaction Effects In The Laboratory," Economic Inquiry, Western Economic Association International, vol. 51(1), pages 563-578, January.
    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. Jessica Weber, 2023. "Coordination Challenges in Wind Energy Development: Lessons from Cross-Case Positive Planning Approaches to Avoid Multi-Level Governance ‘Free-Riding’," Land, MDPI, vol. 12(11), pages 1-25, October.
    2. 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.
    3. Zhang, Zuomin & Wu, Yingjue & Wang, Honglei, 2024. "Corporate financial fragility, R&D investment, and corporate green innovation: Evidence from China," Finance Research Letters, Elsevier, vol. 62(PB).

    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. 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.
    2. Dorner, Zack & Tucker, Steven & Hassan, Gazi M, 2024. "Heterogeneous productivity stabilizes public good contributions under certainty, uncertainty and ambiguity," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 110(C).
    3. Vincent Théroude & Adam Zylbersztejn, 2017. "Cooperation in a risky world," Working Papers 1704, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.
    4. Ramalingam, Abhijit & Stoddard, Brock V. & Walker, James M., 2019. "The market for talent: Competition for resources and self-governance in teams," Games and Economic Behavior, Elsevier, vol. 114(C), pages 268-284.
    5. Tjaša Bjedov & Simon Lapointe & Thierry Madiès & Marie Claire Villeval, 2018. "Does decentralization of decisions increase the stability of large groups?," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 51(4), pages 681-716, December.
    6. 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.
    7. Vincent Théroude & Adam Zylbersztejn, 2017. "Cooperation in a risky world," Working Papers halshs-01443917, HAL.
    8. Martin G. Kocher & Peter Martinsson & Kristian Ove R. Myrseth & Conny E. Wollbrant, 2017. "Strong, bold, and kind: self-control and cooperation in social dilemmas," Experimental Economics, Springer;Economic Science Association, vol. 20(1), pages 44-69, March.
    9. Kreitmair, Ursula & Bower-Bir, Jacob, 2021. "Too different to solve climate change? Experimental evidence on the effects of production and benefit heterogeneity on collective action," Ecological Economics, Elsevier, vol. 184(C).
    10. Luigi Butera & Philip Grossman & Daniel Houser & John List & Marie-Claire Villeval, 2020. "A New Mechanism to Alleviate the Crises of Confidence in Science - With an Application to the Public Goods Game," Artefactual Field Experiments 00684, The Field Experiments Website.
    11. Abhijit Ramalingam & Brock V. Stoddard & James M. Walker, 2020. "Naturally occurring enhancements to competition for talent in teams," Working Papers 21-02, Department of Economics, Appalachian State University.
    12. Luca Corazzini & Christopher Cotton & Paola Valbonesi, 2013. "Too many charities? Insight from an experiment with multiple public goods and contribution thresholds," Working Papers 2013-13, University of Miami, Department of Economics.
    13. Angelovski, Andrej & Di Cagno, Daniela & Güth, Werner & Marazzi, Francesca & Panaccione, Luca, 2018. "Does heterogeneity spoil the basket? The role of productivity and feedback information on public good provision," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 77(C), pages 40-49.
    14. Maoliang Ye & Jie Zheng & Plamen Nikolov & Sam Asher, 2020. "One Step at a Time: Does Gradualism Build Coordination?," Management Science, INFORMS, vol. 66(1), pages 113-129, January.
    15. Caleb A. Cox & Brock Stoddard, 2021. "Common-Value Public Goods and Informational Social Dilemmas," American Economic Journal: Microeconomics, American Economic Association, vol. 13(2), pages 343-369, May.
    16. Bilancini, Ennio & Boncinelli, Leonardo & Nardi, Chiara & Pizziol, Veronica, 2024. "Cooperation is unaffected by the threat of severe adverse events in public goods games," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 108(C).
    17. Kohei Nitta, 2014. "The Effect of Income Heterogeneity in An Experiment with Global and Local Public Goods," Working Papers 201403, University of Hawaii at Manoa, Department of Economics.
    18. Ai Takeuchi & Erika Seki, 2019. "Coordination and free-riding problems in blood donations," Discussion Papers in Economics and Business 19-15, Osaka University, Graduate School of Economics.
    19. Jun Maekawa & Koji Shimada & Ai Takeuchi, 2022. "Sustainability of renewable energy investment motivations during a feed-in-tariff scheme transition: evidence from a laboratory experiment," The Japanese Economic Review, Springer, vol. 73(1), pages 83-101, January.
    20. Véronique Flambard & Fabrice Le Lec & Rustam Romaniuc, 2024. "An experimental comparison of contributions in collective prevention games and public goods games," Economic Inquiry, Western Economic Association International, vol. 62(4), pages 1598-1617, October.

    More about this item

    Keywords

    Charity; Freeriding; Coordination; Multiplepublicgoods; Laboratoryexperiment; 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

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:osk:wpaper:1915r. 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: The Economic Society of Osaka University (email available below). General contact details of provider: https://edirc.repec.org/data/feosujp.html .

    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.