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|Title: ||Three Essays in Public Economics: Theory and Experiments|
|Authors: ||Faravelli, Marco|
|Supervisor(s): ||Hopkins, Ed|
|Issue Date: ||2007|
|Abstract: ||This thesis is composed of three chapters, which can be read independently.
first chapter we explore distributive justice and perception of fairness using
survey data from freshmen and senior students of economics and sociology. We analyse
the impact of context and education on their preferences over a hypothetical distribution
of resources between individuals which presents a trade off between efficiency and equality. With context giving minimal information, economics students are less likely to favour
equality; studying economics influences the preferences of the subjects, increasing this
difference. However, when the same problem is inserted into a meaningful context, the difference disappears. Four distribution mechanisms are analysed: egalitarianism, maximin,
utilitarianism and utilitarianism with a floor constraint.
The second chapter considers a public good game with heterogeneous endowments and
incomplete information affected by extreme free-riding. We overcome this problem through
the implementation of a contest in which several prizes may be awarded. We identify a
monotone equilibrium, in which the contribution is strictly increasing in the endowment.
We prove that it is optimal for the social planner to set the last prize equal to zero, but
otherwise total expected contribution is invariant to the prize structure. Finally, we show
that private provision via a contest Pareto-dominates public provision and is higher than
the total contribution raised through a lottery.
The third chapter investigates fund-raising mechanisms based on a prize as a way to
overcome free riding in the private provision of public goods, under the assumptions of
income heterogeneity and incomplete information about income levels. We compare experimentally the performance of a lottery, an all-pay auction and a benchmark voluntary contribution mechanism. We
find that prize-based mechanisms perform better than voluntary contribution in terms of public good provision after accounting for the cost of the
prize. Comparing the prize-based mechanisms, total contributions are significantly higher
in the lottery than in the all-pay auction. Focusing on individual income types, the lottery outperforms voluntary contributions and the all-pay auction throughout the income
|Appears in Collections:||Business and Management thesis and dissertation collection|
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