Private Provision of a Discrete Public Good: Continuous-Strategy Equilibria in the Private-Information Subscription Game

We reconsider Laussel and Palfrey's analysis of private provision of discrete public goods via the subscription game. We show their semi-regular equilibria do not exist, casting doubt on their efficiency analysis. Taking players' values for the public good as uniformly distributed on <formula format="inline"> <file name="jpet_375_mu1.gif" type="gif" /> </formula>, we exhibit previously unrecognized continuous equilibria-those with contribution strategies strictly increasing up to their maximum values, not necessarily equal to the provision cost, c, at which point they become flat. We show piecewise-linear equilibria are not incentive efficient; and if <formula format="inline"> <file name="jpet_375_mu2.gif" type="gif" /> </formula> and <formula format="inline"> <file name="jpet_375_mu3.gif" type="gif" /> </formula>, then all symmetric equilibria are interim incentive inefficient. Copyright © 2008 Wiley Periodicals, Inc..