Pre-negotiation commitment and internalization in public good provision through bilateral negotiations

A-Tier
Journal: Journal of Public Economics
Year: 2019
Volume: 175
Issue: C
Pages: 84-93

Authors (2)

Matsushima, Noriaki (Osaka University) Shinohara, Ryusuke (not in RePEc)

Score contribution per author:

2.011 = (α=2.01 / 2 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

A profit-maximizing public good supplier endogenously determines the level of the public good and simultaneously negotiates with beneficiaries of the good one by one. A pre-negotiation commitment on the production level of the public good by the supplier enhances the internalization of beneficiaries' preferences. With the commitment, the supplier produces the public good at an efficient level in equilibrium if and only if its bargaining power is sufficiently weak. In addition, the public good is produced excessively as a result of the commitment when the supplier's bargaining power is sufficiently strong.

Technical Details

RePEc Handle
repec:eee:pubeco:v:175:y:2019:i:c:p:84-93
Journal Field
Public
Author Count
2
Added to Database
2026-01-25