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Efficient public good provision by lotteries with nonlinear pricing.

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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]
Copyright of Journal of Economic Behavior & Organization is the property of Elsevier B.V. and its content may not be copied or emailed to multiple sites without the copyright holder's express written permission. Additionally, content may not be used with any artificial intelligence tools or machine learning technologies. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)
Database: Engineering Source
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DbLabel: Engineering Source
An: 160333485
AccessLevel: 6
PubType: Academic Journal
PubTypeId: academicJournal
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  Data: Efficient public good provision by lotteries with nonlinear pricing.
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  Data: <searchLink fieldCode="AR" term="%22Liu%2C+Tracy+Xiao%22">Liu, Tracy Xiao</searchLink><relatesTo>1</relatesTo> (AUTHOR)<i> liuxiao@sem.tsinghua.edu.cn</i><br /><searchLink fieldCode="AR" term="%22Lu%2C+Jingfeng%22">Lu, Jingfeng</searchLink><relatesTo>2</relatesTo> (AUTHOR)<i> ecsljf@nus.edu.sg</i><br /><searchLink fieldCode="AR" term="%22Wang%2C+Zhewei%22">Wang, Zhewei</searchLink><relatesTo>1,3</relatesTo> (AUTHOR)<i> zheweiwang@sdu.edu.cn</i>
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  Data: <searchLink fieldCode="JN" term="%22Journal+of+Economic+Behavior+%26+Organization%22">Journal of Economic Behavior & Organization</searchLink>. Dec2022, Vol. 204, p680-698. 19p.
– Name: Subject
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  Data: <searchLink fieldCode="DE" term="%22Public+spending%22">Public spending</searchLink><br /><searchLink fieldCode="DE" term="%22Common+good%22">Common good</searchLink><br /><searchLink fieldCode="DE" term="%22Tickets%22">Tickets</searchLink><br /><searchLink fieldCode="DE" term="%22Lottery+tickets%22">Lottery tickets</searchLink><br /><searchLink fieldCode="DE" term="%22Lotteries%22">Lotteries</searchLink><br /><searchLink fieldCode="DE" term="%22Prices%22">Prices</searchLink><br /><searchLink fieldCode="DE" term="%22Direct+costing%22">Direct costing</searchLink>
– Name: Abstract
  Label: Abstract
  Group: Ab
  Data: 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]
– Name: AbstractSuppliedCopyright
  Label:
  Group: Ab
  Data: <i>Copyright of Journal of Economic Behavior & Organization is the property of Elsevier B.V. and its content may not be copied or emailed to multiple sites without the copyright holder's express written permission. Additionally, content may not be used with any artificial intelligence tools or machine learning technologies. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract.</i> (Copyright applies to all Abstracts.)
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RecordInfo BibRecord:
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    Identifiers:
      – Type: doi
        Value: 10.1016/j.jebo.2022.10.033
    Languages:
      – Code: eng
        Text: English
    PhysicalDescription:
      Pagination:
        PageCount: 19
        StartPage: 680
    Subjects:
      – SubjectFull: Public spending
        Type: general
      – SubjectFull: Common good
        Type: general
      – SubjectFull: Tickets
        Type: general
      – SubjectFull: Lottery tickets
        Type: general
      – SubjectFull: Lotteries
        Type: general
      – SubjectFull: Prices
        Type: general
      – SubjectFull: Direct costing
        Type: general
    Titles:
      – TitleFull: Efficient public good provision by lotteries with nonlinear pricing.
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          Name:
            NameFull: Liu, Tracy Xiao
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          Name:
            NameFull: Lu, Jingfeng
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            NameFull: Wang, Zhewei
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          Dates:
            – D: 01
              M: 12
              Text: Dec2022
              Type: published
              Y: 2022
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              Value: 204
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            – TitleFull: Journal of Economic Behavior & Organization
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