Free Riders Do not Like Uncertainty.

We examine the effect of introducing Knightian uncertainty into a simple model of public good provision. We find that uncertainty may reduce the free-rider problem if utility is concave in public goods or there are decreasing returns to scale in the production of public goods. It is possible that free-riding may be less in a large society. We argue that our results are compatible with the experimental evidence.

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Year of publication:	1996
Authors:	Eichberger, J. ; Kelsey, D.
Institutions:	Department of Economics, University of Birmingham
Subject:	UNCERTAINTY \| RISK \| PUBLIC GOODS

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Series:	Discussion Papers.
Type of publication:	Book / Working Paper
Notes:	35 pages
Classification:	D80 - Information and Uncertainty. General ; D81 - Criteria for Decision-Making under Risk and Uncertainty ; H40 - Publicly Provided Goods. General ; H41 - Public Goods
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005357555