Public goods game with ambiguous threshold

Daiki Kishishita, Hiroyuki Ozaki

Research output: Contribution to journalArticle

Abstract

Various collective action problems can be described as a discrete public goods game with a threshold. In this game, players may be reluctant to contribute to the provision of public goods when the threshold value is uncertain. We derive equilibria when players face ambiguity (i.e., Knightian uncertainty) on the threshold value by using Choquet expected utility. Furthermore, we show that in a class of neo-additive capacities, an increase in ambiguity decreases the equilibrium maximal number of contributors, irrespective of players’ ambiguity-attitudes. This contrasts to what McBride (2006) shows when the probability distribution is known.

Original languageEnglish
Article number109165
JournalEconomics Letters
Volume191
DOIs
Publication statusPublished - 2020 Jun

Keywords

  • Ambiguity
  • Choquet expected utility
  • Collective action
  • Public goods

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

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