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An impure public good model with lotteries in large grou

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Abstract

We analyze the efect of a large group on an impure public goods model with lotteries. We show that as populations get large, and with selfish preferences, the level of contributions converges to the one given by voluntary contributions. With altruistic preferences (of the warm glow type), the contributions converge to a level strictly higher than those given by voluntary contributions, even though in general they do not yield First-best levels.

Suggested Citation

  • Antonio Cabrales & Haydée Lugo, 2011. "An impure public good model with lotteries in large grou," Documentos de Trabajo del ICAE 2011-05, Universidad Complutense de Madrid, Facultad de Ciencias Económicas y Empresariales, Instituto Complutense de Análisis Económico.
    • Handle: RePEc:ucm:doicae:1105
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    References listed on IDEAS

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    1. John Morgan, 2000. "Financing Public Goods by Means of Lotteries," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 67(4), pages 761-784.
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    3. Borg, Mary O. & Mason, Paul M., 1988. "The Budgetary Incidence of a Lottery to Support Education," National Tax Journal, National Tax Association;National Tax Journal, vol. 41(1), pages 75-85, March.
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    7. Borg, Mary O. & Mason, Paul M., 1988. "The Budgetary Incidence of a Lottery to Support Education," National Tax Journal, National Tax Association, vol. 41(1), pages 75-85, March.
    8. Andreoni, James, 1989. "Giving with Impure Altruism: Applications to Charity and Ricardian Equivalence," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1447-1458, December.
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    10. Andreoni, James, 1990. "Impure Altruism and Donations to Public Goods: A Theory of Warm-Glow Giving?," Economic Journal, Royal Economic Society, vol. 100(401), pages 464-477, June.
    11. Akram Temimi, 2001. "Does Altruism Mitigate Free-riding and Welfare Loss?," Economics Bulletin, AccessEcon, vol. 8(5), pages 1-8.
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    Cited by:

    1. Gallier, Carlo & Reif, Christiane & Römer, Daniel, 2014. "Consistent or balanced? On the dynamics of voluntary contributions," ZEW Discussion Papers 14-060, ZEW - Leibniz Centre for European Economic Research.

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    More about this item

    Keywords

    Lotteries; Public good; Warm glow; Eficiency.;
    All these keywords.

    JEL classification:

    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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