Dynamic Free Riding with Irreversible Investments

• 成果类型: Article
• 署名作者: Battaglini, Marco; Nunnari, Salvatore; Palfrey, Thomas R.
• 署名单位: Princeton University; Columbia University; California Institute of Technology
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.104.9.2858
• 发表日期: 2014
• 页码: 2858-2871
• 关键词: CONTRIBUTION GAMES; gradualism

摘要

We study the Markov equilibria of a model of free riding in which n infinitely lived agents choose between private consumption and irreversible contributions to a durable public good. We show that the set of equilibrium steady states converges to a unique point as depreciation converges to zero. For any level of depreciation, moreover, the highest steady state converges to the efficient level as agents become increasingly patient. These results are in contrast to the case with reversible investments, where a continuum of inefficient equilibrium steady states exists for any level of depreciation, discount factor, and size of population.