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Bayesian Equilibrium in a Public Good Economy
Author(s) -
HONSNIR SHLOMIT,
SHITOVITZ BENYAMIN,
SPIEGEL MENAHEM
Publication year - 2010
Publication title -
journal of public economic theory
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.809
H-Index - 32
eISSN - 1467-9779
pISSN - 1097-3923
DOI - 10.1111/j.1467-9779.2010.01456.x
Subject(s) - economics , endowment , ex ante , consumption (sociology) , microeconomics , bayesian probability , private information retrieval , differential (mechanical device) , public information , public good , general equilibrium theory , mathematical economics , economy , computer science , macroeconomics , thermodynamics , social science , philosophy , physics , computer security , internet privacy , epistemology , artificial intelligence , sociology
This paper studies the provision of a public good via voluntary contributions in an economy with uncertainty and differential information. Consumers differ in their private information regarding their future endowment as well as in their preferences. Each consumer selects her consumption ex ante , i.e., before knowing the state of nature. Contributions to the provision of the public good are determined ex post , i.e., when the state of nature is realized. Assuming that some normality conditions hold, a Bayesian equilibrium exists. Further, equilibrium is unique, regardless of the number of consumers, when either (1) the information partitions of consumers can be ranked from the finest to the coarsest, or (2) there are only two types of consumers.