This article investigates fund-raising mechanisms based on a prize as a way to overcome free riding in the private provision of public goods. We focus on an environment characterised by income heterogeneity and incomplete information about income levels. Our analysis compares 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. Contrary to the theoretical predictions, contributions are significantly higher in the lottery than in the all-pay auction, both overall and by individual income types. © The Author(s). Journal compilation © Royal Economic Society 2009.

Corazzini, L., Faravelli, M., Stanca, L. (2010). A prize to give for: an experiment on public good funding mechanisms. ECONOMIC JOURNAL, 120(547), 944-967 [10.1111/j.1468-0297.2009.02314.x].

A prize to give for: an experiment on public good funding mechanisms

Corazzini, L;STANCA, LUCA MATTEO
2010

Abstract

This article investigates fund-raising mechanisms based on a prize as a way to overcome free riding in the private provision of public goods. We focus on an environment characterised by income heterogeneity and incomplete information about income levels. Our analysis compares 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. Contrary to the theoretical predictions, contributions are significantly higher in the lottery than in the all-pay auction, both overall and by individual income types. © The Author(s). Journal compilation © Royal Economic Society 2009.
Articolo in rivista - Articolo scientifico
auctions; lotteries; public goods; lab experiments
English
2010
120
547
944
967
none
Corazzini, L., Faravelli, M., Stanca, L. (2010). A prize to give for: an experiment on public good funding mechanisms. ECONOMIC JOURNAL, 120(547), 944-967 [10.1111/j.1468-0297.2009.02314.x].
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/10281/6391
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