No |
SDES-2014-3 |
Title |
The instability of the voluntary contribution mechanism |
Author |
Tatsuyoshi Saijo |
Abstract |
I consider systems with voluntary contribution mechanisms (VCM) in a quasilinear
environment, showing that they are not asymptotically stable under simultaneous difference
equations, and are structurally unstable under simultaneous differential equations. However, a
VCM system is stable in a Cobb–Douglas (CD) environment under simultaneous differential
equations; it is also stable under simultaneous difference equations given conditions on the
slope of best response functions and the number of players. Most of the parameters investigated
in nonlinear experiments on the VCM so far have been on the boundaries between stability and
instability, and there has been hardly any work on instability. Therefore, research on the private
provision of public goods faces a new challenge in addition to free riding. |
Revised version published in |
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