| Author: | Vicary, S. Sandler, T. |
| Title: | Weakest-link public goods: Giving in-kind or transferring money |
| Journal: | European Economic Review
2002 : SEP, VOL. 46:8, p. 1501-1520 |
| Index terms: | Economic theory Transfer payments |
| Freeterms: | Cash |
| Language: | eng |
| Abstract: | This paper extends the analysis of weakest-link public goods, whose level equals the smallest of the agents' provision levels, by permitting an agent either to increase one's own provision or else augment both one's own provision and that of the other agent/s. Nash equilibria may be either symmetric with agents matching one another's provision or else asymmetric with an in-kind transfer by one agent to another. An equilibrium with cash transfers, but no in-kind transfers, may be Pareto superior to one with only in-kind transfers. If agents differ in their efficiency, then in-kind transfers by the low-cost agent may dominate a cash transfer. The possibility of Pareto-improving transfers is enhanced as the number of agents increases. |
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