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Sequential Provision of Public Goods

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  • Hal R. Varian

    (University of Michigan, Dept of Economics)

Abstract

I consider the private provision of public goods in two stage games. If the agent who likes the public good least contributes first, the amount of the public good supplied will be the same as in the Nash equilibrium. If the agent who likes the public good most contributes first, less of the public good may be supplied. Similar results hold if the first mover is uncertain of the tastes of the other agent. If the agents bid for the right to move first, the agent who values the public good least will win. If each agent chooses the rate at which he will subsidize the other agent's contributions, the subsidies that support the Lindahl allocation are the unique equilibrium outcome. I also describe two related subsidy-setting games that yield Lindahl allocations in $n$-person games with general utility functions.}

Suggested Citation

  • Hal R. Varian, 1994. "Sequential Provision of Public Goods," Public Economics 9401003, University Library of Munich, Germany.
  • Handle: RePEc:wpa:wuwppe:9401003
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • D6 - Microeconomics - - Welfare Economics
    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • H - Public Economics

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