Rank-order competition in the voluntary provision of impure public goods

Angelovski, Andrej ORCID: https://orcid.org/0000-0003-3011-8002, Neugebauer, Tibor and Servátka, Maroš (2019) Rank-order competition in the voluntary provision of impure public goods. Economic Inquiry, 57 (4) . pp. 2163-2183. ISSN 0095-2583 (doi:10.1111/ecin.12797)

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Abstract

Publicly provided goods often create differential payoffs due to timely or spatial distances of group members. We design and test a provision mechanism which utilizes rank competition to mitigate free-riding in impure public goods. In our Rank-Order Voluntary Contribution Mechanism (Rank-Order-VCM) group members compete via observable contributions for a larger share of the public good; high contributors receive preferential access (a larger share), while low contributors receive restricted access (a lower share). In a laboratory experiment Rank-Order-VCM elicits median contributions equal to the full endowment throughout the finitely played games with constant groups. In the control treatment, with randomly assigned ranks, the contributions are significantly lower and decline over time. We thus provide evidence of rank competition, in situations where discriminatory access to public goods is possible, being efficiency enhancing.

Item Type: Article
Research Areas: A. > Business School
A. > Business School > Economics
Item ID: 28305
Notes on copyright: This is the peer reviewed version of the following article: Angelovski, A. , Neugebauer, T. and Servátka, M. (2019), Rank-order competition in the voluntary provision of impure public goods. Econ Inq, 57: 2163-2183., which has been published in final form at https://doi.org/10.1111/ecin.12797. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions.
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Depositing User: Andrej Angelovski
Date Deposited: 25 Nov 2019 16:16
Last Modified: 15 May 2020 01:02
URI: https://eprints.mdx.ac.uk/id/eprint/28305

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