A Mechanism for Allocating the Expenses of Public Goods: Analyses of a Swedish Government Project
نویسندگان
چکیده
Private provision of public goods has been investigated by many theoretical frameworks and experiments, most of which are difficult to apply in practice, let alone implement in the public sector. In this paper we offer a theoretical analysis of a Swedish government project's cost-sharing mechanism, which gave participants incentives to misrepresent their willingness to pay (WTP), some to understate, the others to overstate, yet still ended up successfully providing a public good. We find that if the incentive is given randomly to participants, the possibility of misreporting their WTP would be reduced and the true WTP could be induced.
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