Public good provision inefficiency revealed in common agency game study
The article explores how public goods are provided when some people know more than others. Instead of a middleman, individuals with private information about their willingness to pay offer money to an agent to produce the public good. In this setup, people don't reduce their contributions to free-ride, but to reveal their private information to the agent. The study shows that the outcomes are inefficient, but can be efficient if the type distribution follows a specific pattern. This contrasts with more positive results when everyone has complete information. The research also looks at different scenarios like direct contracting and complex communication between individuals and the agent.