TY - JOUR
T1 - Beliefs and Public Good Provision with Anonymous Contributors
AU - Maldonado, Wilfredo Leiva
AU - Rodrigues-Neto, Jose A.
N1 - Publisher Copyright:
© 2016 Wiley Periodicals, Inc.
PY - 2016
Y1 - 2016
N2 - 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.
AB - 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.
UR - http://www.scopus.com/inward/record.url?scp=84960431189&partnerID=8YFLogxK
U2 - 10.1111/jpet.12161
DO - 10.1111/jpet.12161
M3 - Article
SN - 1467-9779
VL - 18
SP - 691
EP - 708
JO - Journal of Public Economic Theory
JF - Journal of Public Economic Theory
IS - 5
ER -