Arbeitspapier

Individual responsibility and the funding of collective goods

When a deficit occurs in the funding of collective goods, it is usually covered by raising the amount of taxes or by rationing the supply of the goods. This article compares the efficiency of these institutions. We report the results of a 2x2 experiment based on a game in the first stage of which subjects can voluntarily contribute to the funding of a collective good that is being used to compensate the victims of a disaster. In the second stage of the game, in case of a deficit, we introduce either taxation or rationing. Each treatment is subjected to two conditions: the burden of the deficit is either uniform for all the subjects, or individualized according to the first-stage contribution. We show that the individualized treatments favor the provision of the collective good through voluntary cooperation whereas the uniform treatments encourage free-riding. Individualized taxation brings the voluntary contributions closer to the optimum while uniform rationing appears to be the worst system since free-riding restrains the provision of the good.

Sprache
Englisch

Erschienen in
Series: IZA Discussion Papers ; No. 3041

Klassifikation
Wirtschaft
Thema
Collective goods
taxation
rationing
responsibility
interior optimum
experiment
Öffentliches Gut
Unternehmensfinanzierung
Rationierung
Steuer
Spieltheorie
Pareto-Optimum
Theorie

Ereignis
Geistige Schöpfung
(wer)
Lévy-Garboua, Louis
Montmarquette, Claude
Villeval, Marie-Claire
Ereignis
Veröffentlichung
(wer)
Institute for the Study of Labor (IZA)
(wo)
Bonn
(wann)
2007

Handle
Letzte Aktualisierung
10.03.2025, 11:44 MEZ

Datenpartner

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Objekttyp

  • Arbeitspapier

Beteiligte

  • Lévy-Garboua, Louis
  • Montmarquette, Claude
  • Villeval, Marie-Claire
  • Institute for the Study of Labor (IZA)

Entstanden

  • 2007

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