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A Note on Contribution Games with Loss Functions

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  • Russo, Giuseppe
  • Senatore, Luigi

Abstract

Decisions on joint funding of continuous public goods between two agents often involve heterogeneous targets. We introduce loss functions in a contribution game in order to study the effect of this conflict. Unlike Varian (1994), joint contribution occurs only if the players’ targets are sufficiently close and the sequential game reduces free riding problems, while total contribution is higher in the simultaneous game.

Suggested Citation

  • Russo, Giuseppe & Senatore, Luigi, 2011. "A Note on Contribution Games with Loss Functions," MPRA Paper 33423, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:33423
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    1. Simon Gaechter & Daniele Nosenzo & Elke Renner & Martin Sefton, 2009. "Sequential versus simultaneous contributions to public goods: Experimental evidence," Discussion Papers 2009-07, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
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    7. (*), 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.
    8. Parimal Bag & Santanu Roy, 2011. "On sequential and simultaneous contributions under incomplete information," International Journal of Game Theory, Springer;Game Theory Society, vol. 40(1), pages 119-145, February.
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    Cited by:

    1. Giuseppe Russo & Luigi Senatore, 2013. "Who contributes? A strategic approach to a European immigration policy," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-16, December.

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    More about this item

    Keywords

    Public Goods; Intergovernmental Relations;

    JEL classification:

    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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