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Public Good Provision Games on Networks with Resource Pooling

  • Mohammad Mahdi KhaliliEmail author
  • Xueru Zhang
  • Mingyan Liu
Conference paper
Part of the Static & Dynamic Game Theory: Foundations & Applications book series (SDGTFA)

Abstract

We consider the interaction of strategic agents and their decision-making process toward the provision of a public good. In this interaction, each user exerts a certain level of effort to improve his own utility. At the same time, the agents are interdependent and the utility of each agent depends not only on his own effort but also on the other agents’ effort level. As the agents have a limited budget and can exert limited effort, question arises as to whether there is advantage to agents pooling their resources. In this study, we show that resource pooling may or may not improve the agents’ utility when they are driven by self-interest. We identify some scenarios where resource pooling does lead to social welfare improvement as compared to without resource pooling. We also propose a taxation–subsidy mechanism that can effectively incentivize the agents to exert socially optimal effort under resource pooling.

Keywords

Public good Resource pooling Social welfare 

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Copyright information

© Springer Nature Switzerland AG 2019

Authors and Affiliations

  • Mohammad Mahdi Khalili
    • 1
    Email author
  • Xueru Zhang
    • 1
  • Mingyan Liu
    • 1
  1. 1.University of MichiganAnn ArborUSA

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