Inequality and the allocation of collective goods

We examine the allocation of a voluntarily-provided collective good with inequality in endowments or productive capabilities. After group members choose their contributions to a collective good, a third-party allocator distributes the resulting value among the group members. With and without inequal...

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Bibliographic Details
Published in:Journal of economic behavior & organization 2024-04, Vol.220, p.756-767
Main Authors: Cox, Caleb A., Stoddard, Brock
Format: Article
Language:English
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Summary:We examine the allocation of a voluntarily-provided collective good with inequality in endowments or productive capabilities. After group members choose their contributions to a collective good, a third-party allocator distributes the resulting value among the group members. With and without inequality, we find allocators significantly improve efficiency compared to automatic equal division of the collective good. However, inequality creates a conflict between various notions of equitable distribution, potentially diminishing the allocator's ability to incentivize contribution. Our results show that inequality in endowments or productive capabilities reduces the effectiveness of allocators compared to the baseline case of equality.
ISSN:0167-2681
1879-1751
DOI:10.1016/j.jebo.2024.02.009