Pre-negotiation commitment and internalization in public good provision through bilateral negotiations

• 成果类型: Article
• 署名作者: Matsushima, Noriaki; Shinohara, Ryusuke
• 署名单位: University of Osaka; Hosei University
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2019.03.009
• 发表日期: 2019
• 页码: 84-93
• 关键词: public good; Simultaneous bilateral bargaining; Supplier bargaining power; Nash bargaining solution

摘要

A profit-maximizing public good supplier endogenously determines the level of the public good and simultaneously negotiates with beneficiaries of the good one by one. A pre-negotiation commitment on the production level of the public good by the supplier enhances the internalization of beneficiaries' preferences. With the commitment, the supplier produces the public good at an efficient level in equilibrium if and only if its bargaining power is sufficiently weak. In addition, the public good is produced excessively as a result of the commitment when the supplier's bargaining power is sufficiently strong. (C) 2019 Elsevier B.V. All rights reserved.