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https://hdl.handle.net/2440/58220
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Type: | Journal article |
Title: | A case for bundling public goods contributions |
Author: | Ghosh, S. Karaivanov, A. Oak, M. |
Citation: | Journal of Public Economic Theory, 2007; 9(3):425-450 |
Publisher: | Wiley-Blackwell Publishing Inc |
Issue Date: | 2007 |
ISSN: | 1097-3923 1467-9779 |
Statement of Responsibility: | Suman Ghosh, Alexander Karaivanov and Mandar Oak. |
Abstract: | We extend the model of voluntary contributions to multiple public goods by allowing for bundling of the public goods. Specifically, we study the case where agents contribute into a common pool which is then allocated toward the financing of two pure public goods. We explore the welfare implications of allowing for such bundling vis-`a-vis a separate contributions scheme. We show that for high income inequality or for identical preferences among agents bundling leads to higher joint welfare. Interestingly, a welfare improvement can in some cases occur despite a decrease in total contributions. On the contrary, when agents are heterogenous, for low income inequality bundling can lead to lower total contributions and may decrease welfare compared to a separate contribution scheme. Our findings have implications for the design of charitable institutions and international aid agencies. |
Rights: | Copyright 2007 Blackwell Publishing, Inc. |
DOI: | 10.1111/j.1467-9779.2007.00313.x |
Published version: | http://dx.doi.org/10.1111/j.1467-9779.2007.00313.x |
Appears in Collections: | Aurora harvest Economics publications |
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