Dynamic Free Riding with Irreversible Investments

@inproceedings{Battaglini2014DynamicFR,
  title={Dynamic Free Riding with Irreversible Investments},
  author={Marco Battaglini and Salvatore Nunnari and Thomas R. Palfrey},
  year={2014}
}
We study the Markov equilibria of a model of free riding in which n infinitely lived agents choose between private consumption and irreversible contributions to a durable public good. We show that the set of equilibrium steady states converges to a unique point as depreciation converges to zero. For any level of depreciation, moreover, the highest steady state converges to the efficient level as agents become increasingly patient. These results are in contrast to the case with reversible… CONTINUE READING

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