Does Altruism Mitigate Free-riding and Welfare Loss?

A warm-glow motivation for charitable giving has recently been explored as a possible solution to the problem of inefficient private provision of public goods. However, the introduction of warm-glow affects both the efficient level of public good provision as well as the equilibrium level. Hence it is not clear whether warm-glow mitigates or exacerbates inefficiency. We revisit Andreoni's (1989) model of impure altruism and formally analyze this question. Cornes and Sandler''s (1986) index of easy riding and a version of Debreu''s (1951) coefficient of resource utilization are used as measures of free-riding and welfare loss.altruism

A note on duplication of R&D and R&D subsidies

We show that the presumed incompatibility of uncoordinated R&D and competition is not fundamental, but hinges on the nature of R&D spillovers. As a consequence, R&D subsidies may be more effective than previously thought.Duplication

The Role of R&D Technology in Asymmetric Research Joint Ventures

We characterize asymmetric equilibria in two-stage process innovation games and show that they are prevalent in the different models of R&D technology considered in the literature. Indeed, cooperation in R&D may be accompanied by high concentration in the product market. We show that while such an increase may be profitable, it may be socially inefficient.Research and Development, Research Joint Ventures, Process Innovation Games

Equilibrium Selection and the Rate of Convergence in Coordination Games with Simultaneous Play

We apply the dynamic stochastic framework proposed in the recent evolutionary literature to a class of coordination games played simultaneously by the entire population. In these games, payoffs whence best replies are determined by a summary statistic of the population strategy profile. We demonstrate that with simultaneous play, the equilibrium selection depends crucially on how best responses to the summary statistic remain piece-wise constant. In fact, all the strict Nash equilibria in the underlying stage game can be declared stochastically stable depending on how the best response mapping generates piece-wise constant best responses. Furthermore, we show that if the best response mapping is sufficiently asymmetric, the expected waiting time until the unique stochastically stable state is reached is of the same order as the mutation rate, even in the limit as the population size grows to infinity.equilibrium selection; stochastic stability; waiting time; rate of convergence

Discrete Public Goods with Incomplete Information

We investigate a simultaneous discrete public good provision game with incomplete information. To use the terminology of Admati and Perry (1991), we consider both contribution and subscription games. In the former, contributions are not refunded if the project is not completed, while in the latter they are. In the presence of complete information about individuals' valuations for the public good, the difference between the equilibrium outcomes of a subscription game and a contribution game is not significant. However, there is both casual evidence from the fund-raising literature and experimental evidence that subscription games are ``superior '', i.e., a refund increases the chance of providing the good given that it is efficient to do so. Our analysis shows that this is indeed the case in the presence of incomplete information. We compute a symmetric equilibrium for the subscription game and show that it is not necessarily efficient. This inefficiency stems from the difficulties arising in coordinating to overcome the free-rider problem in the presence of incomplete information. Although it is well known that informational disparities impose limits on the efficiency of outcomes, the novel feature of our analysis is to explicitly model the resulting trade-off --- when deciding how much to contribute towards the public good --- between increasing the likelihood of provision and creating incentives for free-riding by the other player. Moreover, we show that for the contribution game, ``contributing zero'' is the only equilibrium for a given range of the fixed cost of provision and for a family of distributions.public goods; incomplete information; continuous distribution

A note on duplication of RD and RD subsidies

We show that the presumed incompatibility of uncoordinated RD and competition is not fundamental, but hinges on the nature of RD spillovers. As a consequence, RD subsidies may be more effective than previously thought

A note on duplication of R&D and R&D subsidies

We show that the presumed incompatibility of uncoordinated R&D and competition is not fundamental, but hinges on the nature of R&D spillovers. As a consequence, R&D subsidies may be more effective than previously thought

Discrete Public goods with incomplete information.

We analyze simultaneous discrete public good games with incomplete information and continuous contributions. To use the terminology of Admati and Perry (1991), we consider contribution and subscription games. In the former, contributions are not refunded if the project is not completed, while in the latter they are. We provide necessary conditions that increasing equilibria of contribution games and subscription games must satisfy for general distribution functions. We then characterize a symmetric equilibrium of the subscription game when valuations are uniformly distributed. Our analysis shows that there is a significant difference between the equilibrium outcomes of the two games. In fact, we show that for the contribution game, ``contributing zero'' is the only equilibrium for a general family of distributions.public goods, incomplete information