Beliefs and Public Good Provision with Anonymous Contributors

Abstract

We analyze a static game of public good contributions where finitely many anonymous players have heterogeneous preferences about the public good and heterogeneous beliefs about the distribution of preferences. In the unique symmetric equilibrium, the only individuals who make positive contributions are those who most value the public good and who are also the most pessimistic; that is, according to their beliefs, the proportion of players who most like the public good is smaller than it would be according to any other possible belief. We predict whether the aggregate contribution is larger or smaller than it would be in an analogous game with complete information and heterogeneous preferences, by comparing the beliefs of contributors with the true distribution of preferences. A trade‐off between preferences and beliefs arises if there is no individual who simultaneously has the highest preference type and the most pessimistic belief. In this case, there is a symmetric equilibrium, and multiple symmetric equilibria occur only if there are more than two preference types.

Warm glow and the transmission of pro‐socialness across generations

“…The literature on voluntary contributions to a public goods has many applications, such as mutual insurance pools (Levy‐Garboua, Montmarquette, Valksmann, & Villeval, ) and anonymous contributors (Maldonado & Rodrigues‐Neto, ), and has been enriched by the theory of clubs (Wooders, ) and by additional considerations such as group structure (Lind, ) and public norm enforcement (Buchholz, Falkinger, & Rübbelke, ).…”

“…The generalization of our model to the case of heterogeneous agents with warm glow is left for future research. For (non‐warm‐glow) models of voluntary contributions to public goods when individuals are heterogeneous and have imperfect information, see Bac and Bag () and Maldonado and Rodrigues‐Neto ().…”

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. …”

Public goods and public bads

“…Unlike other recent papers on public good theory (see, e.g., Barbieri & Malueg, 2016; Caplan, ; Maldonado & Rodrigues‐Neto, ), complete certainty and full information are assumed in our model.…”