Beliefs and Public Good Provision with Anonymous Contributors

Wilfredo Leiva Maldonado, Jose A. Rodrigues-Neto

    Research output: Contribution to journalArticlepeer-review

    6 Citations (Scopus)

    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.

    Original languageEnglish
    Pages (from-to)691-708
    Number of pages18
    JournalJournal of Public Economic Theory
    Volume18
    Issue number5
    DOIs
    Publication statusPublished - 2016

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