Working Paper: NBER ID: w15543
Authors: Nicholas E. Burger; Charles D. Kolstad
Abstract: The literature on voluntary provision of public goods includes recent theoretical work on the formation of voluntary coalitions to provide public goods. Theory is ambiguous on the equilibrium coalition size and contribution rates. We examine the emergence of coalitions, their size, and how uncertainty in public goods provision affects contribution levels and coalition size. We find that contributions decrease when public good returns are uncertain but increase when individuals can form a coalition to provide the good. Contrary a core theoretical result, we find that coalition size increases when the public good benefits are higher. Uncertainty has no effect on coalition size.
Keywords: Public Goods; Coalition Formation; Uncertainty; Experimental Economics
JEL Codes: C7; C91; C92; H23; H4; H41; Q5; Q54
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Uncertainty in public good returns (D89) | Contributions to public goods (H40) |
| Coalition formation (D71) | Contributions to public goods (H40) |
| Higher public good benefits (H49) | Coalition size (D79) |
| Uncertainty (D89) | Coalition size (D79) |