(In)efficient public-goods provision through contests

Kolmar, Martin; Sisak, Dana

doi:10.1007/s00355-013-0769-4

Cited by 5 publications

(2 citation statements)

References 25 publications

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“…In their main 'sorting' result, the contest motivates highly productive individuals to contribute to the public good while low-productivity individuals divert their efforts to the private good. Similarly, Kolmar and Sisak (2011) analyse the private provision of a public good by players who are heterogeneous with respect to utility and cost of producing the public good. The paper discusses the use of multiple prize contests in order to implement efficiency.…”

Section: Literaturementioning

confidence: 99%

Consuming your way to efficiency: Public goods provision through non-distortionary tax lotteries

Giebe

Schweinzer

2014

European Journal of Political Economy

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Consuming your Way to Efficiency: Public Goods Provision through Non-Distortionary Tax Lotteries Terms of use: Documents in EconStor may AbstractWe revisit the classical result that financing a pure public good through taxation of private consumption is inefficient. To this standard setup we add a consumption contest in which consumers can win a prize. We show that an appropriately chosen contest-which we call a 'tax lottery'-can correct the distortion in private consumption while, at the same time, inducing efficient provision of the public good and balancing the government's budget. The result does not depend on whether the public good is provided exogenously or dependent on actual tax revenue. We show that neither pure fundraising contests nor a sales tax combined with a 'simple' lottery can induce efficiency in the standard environment.JEL-Code: C700, D700, H000.

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Section: Literaturementioning

confidence: 99%

Consuming your way to efficiency: Public goods provision through non-distortionary tax lotteries

Giebe

Schweinzer

2014

European Journal of Political Economy

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“…3 See Goeree et al (2005), Lange, List, and Price (2007a), Maeda (2008), Corazzini et al (2010), Kolmar and Wagener (2012), Stancab (2012, 2014), Franke and Leininger (2014), Kolmar and Sisak (2014), Bos (2011Bos ( , 2016, Damianov and Peeters (2018), and Ghosh and Stong (2018). 4 See Lemma 5 in Morgan (2000).…”

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confidence: 99%

Free riders and the optimal prize in public‐good funding lotteries

Jindapon

Yang

2020

J Public Economic Theory

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We prove the existence and uniqueness of an equilibrium in a game where players, whose preferences exhibit constant absolute risk aversion or constant relative risk aversion, contribute to a public good via lottery‐ticket purchases. Contrasting models with risk neutrality, we show that an equilibrium with a strictly positive amount of the public good may not exist without a sufficient number of participants who are not too risk‐averse. We show that players who are more risk‐averse purchase fewer lottery tickets and are more likely to free ride in equilibrium. In fact, it is possible for free riders to place a larger value on the public good than do those who contribute. In a symmetric equilibrium, we show that an upper bound exists for the amount of the public good, even though there are infinitely many participants. Furthermore, we derive a lottery prize that maximizes the amount of the public good in a symmetric equilibrium and find that such a prize always results in an overprovision of the public good.

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Optimal prize structures in elimination contests

Knyazev

2017

Journal of Economic Behavior & Organization

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(In)efficient public-goods provision through contests

Cited by 5 publications

References 25 publications

Consuming your way to efficiency: Public goods provision through non-distortionary tax lotteries

Consuming your way to efficiency: Public goods provision through non-distortionary tax lotteries

Free riders and the optimal prize in public‐good funding lotteries

Optimal prize structures in elimination contests

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