Heterogeneity, impatience, and dynamic private provision of a discrete public good

Abstract

We analyze dynamic private provision of a discrete public good by heterogeneous agents, who differ in terms of their levels of impatience, in a differential game framework. In contrast to the strategic complementarity result for homogeneous individuals, we show that an asymmetric completion Markov perfect equilibrium exists, where the individual contributions and the strategic behaviors depend crucially on an impatience differential: the difference in rates of time preference across groups of individuals. When this differential is insignificant, contributions of both types of individuals are strategic complements. On the other hand, when this impatience differential exceeds a threshold, the contributions of impatient individuals become strategic substitutes, whereas the contributions of patient individuals remain strategic complements. We show that group size has an interesting role to play in the strategic behavior: increasing the number of patient individuals aggravates the incentives to free‐ride by the impatient agents. We also derive a condition under which all the socially beneficial projects get completed in the equilibrium.

Mixed duopoly: Differential game approach

“…If the objective functions of the agents are asymmetric, the analysis of differential games becomes substantially difficult. List and Mason (), Woo (), Long and Sorger (), and Bhattacharya, Tokovenko, and Sardana () are exceptional studies examining such an asymmetric case. In our study, however, the objective functions of agents are significantly different compared with previous studies.…”

Securely implementable social choice functions in divisible and nonexcludable public good economies with quasi‐linear utility functions

“…In voting environments in which the set of alternatives is a metric space and each agent's preference is represented by a continuous utility function, they showed that, if the social choice function satisfies strategy-proofness and its range contains at least three alternatives, 1 See Clarke (1971), Moulin (1994), and Serizawa (1996Serizawa ( , 1999 for nonexcludable public good economies. In addition, see Caplan (2016), Maldonado and Rodrigues-Neto (2016), and Bhattacharya, Tokovenko, and Sardana (2017) for recent theoretical studies on nonexcludable public good economies.…”

“…11See Clarke (), Moulin (), and Serizawa (, ) for nonexcludable public good economies. In addition, see Caplan (), Maldonado and Rodrigues‐Neto (), and Bhattacharya, Tokovenko, and Sardana () for recent theoretical studies on nonexcludable public good economies. …”

Introduction to the JPET special issues commemorating works of James Andreoni, Theodore Bergstrom, Larry Blume, and Hal Varian

“…The pioneering works of Warr (), Bergstrom et al (), and Andreoni (), have motivated much important research on the private provision of public goods which have been an important area for Journal of Public Economic Theory (cf., Barbarari & Malueg, ; Bhattacharya, Oleksiy, & Sardana, ; Caplan, , among many others). One such paper in this issue is Barbieri and Malueg (), who study private provision in a public goods game with incomplete information in which the level of the public good equals the least contribution made by a player.…”