Theoretical Economics Letters
Volume 4, Issue 4 (April 2014)
ISSN Print: 2162-2078 ISSN Online: 2162-2086
Google-based Impact Factor: 1.19 Citations h5-index & Ranking
Changes in the Threshold Uncertainty in a Simultaneous Subscription Game ()
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ABSTRACT
This paper considers a discrete public good subscription game under threshold uncertainty and private information on valuations and analyzes the effect of change in cost uncertainty on the private contribution equilibrium under a simultaneous institution. Comparative statics with respect to the changes in the cost distribution are derived. We find that if the cost distribution becomes more dispersed, in the sense of a mean-preserving spread, the expected total contributions to the public good will decrease. Our proposition provides a policy implication that if the suppliers are able to reduce the uncertainty of the cost distribution, the private contribution to the public good will increase.
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