Timing of Public Good Provision Determines Leadership in Cross-Border Game
The article explores how two governments decide on providing public goods that benefit both countries. By analyzing the timing of their actions, the researchers found that when public goods are substitutes, there is no clear leader. However, when public goods are complementary, each country may take the lead, leading to a coordination issue. The concept of risk-dominance helps determine the leading government in such cases. When public goods have mixed characteristics, the government with substitutable public goods emerges as the leader.