On sequential and simultaneous contributions under incomplete information

PK Bag, S Roy - International Journal of Game Theory, 2011 - Springer
PK Bag, S Roy
International Journal of Game Theory, 2011Springer
When contributors to a common cause (or public good) are uncertain about each others'
valuations, early contributors are likely to be cautious in free-riding on future contributors.
Contrary to the case of complete information, when contributors have independent private
valuations for the public good, the expected total contribution generated in a sequential
move game may be higher than in a simultaneous move game. This is established in a
conventional framework with quasi-linear utility where agents care only about the total …
Abstract
When contributors to a common cause (or public good) are uncertain about each others’ valuations, early contributors are likely to be cautious in free-riding on future contributors. Contrary to the case of complete information, when contributors have independent private valuations for the public good, the expected total contribution generated in a sequential move game may be higher than in a simultaneous move game. This is established in a conventional framework with quasi-linear utility where agents care only about the total provision of the public good (rather than individual contribution levels) and there is no non-convexity in the provision of the public good. We allow for arbitrary number of agents and fairly general distribution of types.
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