Static and dynamic underinvestment: An experimental investigation

• 成果类型: Article
• 署名作者: Agranov, Marina; Frechette, Guillaume; Palfrey, Thomas; Vespa, Emanuel
• 署名单位: California Institute of Technology; New York University; University of California System; University of California Santa Barbara
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2016.09.001
• 发表日期: 2016
• 页码: 125-141

摘要

In this paper, we analyze a stylized version of an environment with public goods, dynamic linkages, and legislative bargaining. Our theoretical framework studies the provision of a durable public good as a modified two-period version of Battaglini et al. (2012). The experimental design allows us to disentangle inefficiencies that would result in a one-shot world (static inefficiencies) from additional inefficiencies that emerge in an environment in which decisions in the present affect future periods (dynamic inefficiencies). We solve the first-best solution and compare it to the symmetric stationary subgame-perfect equilibrium of a legislative bargaining game. The experimental results indicate that subjects do react to dynamic linkages, and, as such, there is evidence of both static and dynamic inefficiencies. The quantitative predictions of the bargaining model with respect to the share of dynamic inefficiencies are closest to the data when dynamic linkages are high. To the extent that behavior is different from the model's predictions, a systematic pattern emerges namely, the use of strategic cooperation, whereby groups increase the efficiency of current proposals by selectively punishing, in future proposals, individuals who propose highly inefficient allocations. (C) 2016 Elsevier B.V. All rights reserved.