Provision Point Mechanisms and Over Provision of Public Goods¤
نویسندگان
چکیده
Charities often let the sum of contributions determine the quantity of services to provide. Some organizations, however, have the option of setting a minimum threshold necessary for provision of the public good, allowing donors to pledge donations contingent on the threshold being reached. Contributions are only collected when su±cient funds have been pledged. We show that contribution-maximizing fundraisers who have such a strategy available to them will choose to use it. In contrast to the traditional model of voluntary contributions, in this model ine±ciency arises as a result of over provision of the public good.
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