Risk Sharing in the Presence of a Public Good

Arbeitspapier

This paper studies an economy where agents can spend resources on consuming a private good and on funding a public good. There is asymmetric information regarding agents' relative preference for private versus public good consumption. I show how private good consumption should be coordinated across agents within each period to ensure efficient contributions to fund the public good. If agents contributed similar amounts in the past, then coordination takes the form of positively correlated contributions in the current period. If an agent contributed more in the past, then coordination prescribes statecontingent socially wasteful private good consumption in the current period for that agent.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Bank of Canada Working Paper ; No. 2015-27

Classification and Topics

• Classification: Wirtschaft ; Fiscal Policy ; Taxation and Subsidies: Efficiency; Optimal Taxation ; Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies ; Intergovernmental Relations; Federalism; Secession ; Asymmetric and Private Information; Mechanism Design ; Economics of Contract: Theory
• Subject: Fiscal policy ; Financial stability ; Financial system regulation and policies

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Schroth, Josef
• Event: Veröffentlichung
• (who): Bank of Canada
• (where): Ottawa
• (when): 2015

Further information

• DOI: doi:10.34989/swp-2015-27
• Handle: http://hdl.handle.net/10419/123774
• Last update: 10.03.2025, 11:43 AM CET