This paper investigates fund-raising mechanisms based on a prize as a way to overcome free riding in the private provision of public goods, under the assumptions of income heterogeneity and incomplete information about income levels. We compare experimentally the performance of a lottery, an all-pay auction and a benchmark voluntary contribution mechanism. We find that prize-based mechanisms perform better than voluntary contribution in terms of public good provision after accounting for the cost of the prize. Comparing the prize-based mechanisms, total contributions are significantly higher in the lottery than in the all-pay auction. Focusing on individual income types, the lottery outperforms voluntary contributions and the all-pay auction throughout the income distribution.
Faravelli, M., Stanca, L.M., & Corazzini, L. (2007). A Prize to Give for: An Experiment on Public Good Funding Mechanisms [Working paper del dipartimento].
Citazione: | Faravelli, M., Stanca, L.M., & Corazzini, L. (2007). A Prize to Give for: An Experiment on Public Good Funding Mechanisms [Working paper del dipartimento]. |
Titolo: | A Prize to Give for: An Experiment on Public Good Funding Mechanisms |
Autori: | Faravelli, M; Stanca, LM; Corazzini, L |
Autori: | |
Carattere della pubblicazione: | Scientifica |
DCMI: | Working paper del dipartimento |
Data di pubblicazione: | 2007 |
Lingua: | English |
Appare nelle tipologie: | 99 - Altro |
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A_Prize_to_Give_for.pdf | Other attachments | Open Access Visualizza/Apri |