Public goods with ambiguity in large economies

• 成果类型: Article
• 署名作者: Kocherlakota, Narayana R.; Song, Yangwei
• 署名单位: University of Rochester; National Bureau of Economic Research; Humboldt University of Berlin
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2019.04.007
• 发表日期: 2019
• 页码: 218-246
• 关键词: Efficient provision; public goods; ambiguity aversion; large economies

摘要

We consider a canonical problem in economics: the financing and provision of a public good. Mailath and Postlewaite (1990) show that under natural information and enforcement frictions, the probability of providing the public good falls to zero as the population size goes to infinity even if provision of the public good is efficient. In this paper, we allow agents to have multiple prior beliefs about others' valuations and to make choices that reflect their aversion to that ambiguity. We show that, as long as each agent's set of priors contains some distribution of valuations under which provision is inefficient, it is possible to find a mechanism in large economies that finances provision of the public good. (C) 2019 Elsevier Inc. All rights reserved.