Dissemination of Student Publications

Dynamic contributions to a public project: the impact of rising marginal benefit and completion benefits.

Student Author(s): Baker, Ronald
Faculty Author(s): -
Department: ECON
Publication: Games
Year: 2018
Abstract: This paper studies both theoretically and experimentally how the existence of a completion benefit at the end of a public project and the increase in the marginal benefit from contributing to the project as some thresholds of contributions are reached lead to more total contributions. \par This paper acknowledges the important insight that the dynamic nature of public project building opens the possibility to design ways to increase the attractiveness of the project and mitigate the free-rider problem within a group. \par The main findings are that: \par (i) completion benefits are crucial to helping to complete a project, more than increasing the marginal value of contribution alone; \par (ii) the combination of completion benefits and increased value of contribution leads to the highest level of contributions.
Link: Dynamic contributions to a public project: the impact of rising marginal benefit and completion benefits.