Bibliographic Details
| Title: |
Efficient public good provision by lotteries with nonlinear pricing. |
| Authors: |
Liu, Tracy Xiao1 (AUTHOR) liuxiao@sem.tsinghua.edu.cn, Lu, Jingfeng2 (AUTHOR) ecsljf@nus.edu.sg, Wang, Zhewei1,3 (AUTHOR) zheweiwang@sdu.edu.cn |
| Source: |
Journal of Economic Behavior & Organization. Dec2022, Vol. 204, p680-698. 19p. |
| Subjects: |
Public spending, Common good, Tickets, Lottery tickets, Lotteries, Prices, Direct costing |
| Abstract: |
In this paper, we introduce nonlinear pricing of lottery tickets to the mechanism of Morgan (2000), in which a lottery is used to finance the public good. In a model with n symmetric agents, we find that incorporating this instrument fully achieves the efficient provision of public good when each agent's initial wealth is sufficiently high. In a model with two asymmetric agents, there exists a nonlinear lottery mechanism that induces efficient public good provision provided that agents are not too heterogenous. Intuitively, the proposed nonlinear pricing rule leads to a decreasing marginal cost for ticket purchase, which provides stronger incentives for agents to make contributions, compared with Morgan (2000). [ABSTRACT FROM AUTHOR] |
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| Database: |
Engineering Source |
