From weakest-link to best-shot: The voluntary provision of public goods
✍ Scribed by Jack Hirshleifer
- Publisher
- Springer US
- Year
- 1983
- Tongue
- English
- Weight
- 843 KB
- Volume
- 41
- Category
- Article
- ISSN
- 0048-5829
No coin nor oath required. For personal study only.
✦ Synopsis
It has traditionally been assumed that the socially available amount X,of a public good is the simple sum of the separate amounts x i produced by the i = 1, . .., I members of the community. But there are many other possibilities of practical importance. Among them are: (i)
Weakest-link rule, where the socially available amount is the minimum of the quantities individually provided, and (ii) Best-shot rule, where the socially available amount is the maximum of the individual quantities. The former tends to arise in linear situations, where each individual has a veto on the total to be provided (e.g., if each is responsible for one link of a chain); the latter tends to arise when there is a single prize of overwhelming importance for the community, with any individual's effort having a chance of securing the prize.
In comparison with the standard Summation formula of ordinary public-good theory, it is shown that underprovision of the public good tends to considerably moderated when the Weakest-link function is applicable, but aggravated when the Best-shot function is applicable. In time of disaster, where the survival of the community may depend upon each person's doing his duty, the conditions for applicability of the Weakest-link rule are approximated. This circumstance explains the historical observation that disaster conditions tend to elicit an extraordinary amount of unselfish behavior.
Anarchia is a perfectly circular island, and each citizen owns a wedgeshaped slice (not all equal) from the center to the sea. Like the Netherlands, Anarchia is protected by dikes from occasional storms that threaten to flood the land. But since Anarchia has no government, everyone makes his own decision as to how high a dike to build. While the height of each citizen's dike is perfectly visible to all, the customs of Anarchia forbid enforcement of any threat, inducement, or contract whereby some parties might influence the choices of others. In times of flood the sea will penetrate the sector belonging to whichever citizen has constructed the lowest dike, but the topography of Anarchia is such that no matter where the sea enters, damage will be suffered equally over the whole island. The economists of Anarchia have long realized that flood-protection for their island is a public good. Many centralized schemes for motivating individuals to build dikes of the socially optimal height have been discussed, but Anarchia's citizens find any such social planning intolerable. It so