A Note on Contribution Games with Loss Functions

Russo, Giuseppe and Senatore, Luigi (2011): A Note on Contribution Games with Loss Functions.

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.

• Item Type: MPRA Paper
• Language: English
• Keywords: Public Goods, Intergovernmental Relations
• Subjects: H - Public Economics > H7 - State and Local Government ; Intergovernmental Relations > H77 - Intergovernmental Relations ; Federalism ; Secession; H - Public Economics > H4 - Publicly Provided Goods > H41 - Public Goods; C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C72 - Noncooperative Games

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