ePrints

On a mechanism that improves efficiency and reduces inequality in voluntary contribution games

Lookup NU author(s): Dr Tom Lane

Downloads

• Published version [.pdf]

Licence

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License (CC BY-NC-ND).

Abstract

We consider the class of linear voluntary contribution games under the general assumption of heterogeneous endowments. In this context, we generalize the Galbraith Mechanism (GM) and assess its performance relative to a fixed equal sharing allocation in both theory and experiments. Three main empirical results emerge. First, the GM raises average contributions significantly above those under an equal-shares allocation. Second, the GM simultaneously reduces income inequality as it improves efficiency. Third, a player's contribution and allocation behavior is sensitive to her position in the endowment distribution. In all their decision-making, agents consistently place greater emphasis on absolute contribution levels when they are rich, and on contribution ratios (contributions relative to endowments) when they are poor.

Publication metadata

Author(s): Falvey R, Lane T, Luckraz S

Publication type: Article

Publication status: Published

Journal: Games and Economic Behavior

Year: 2025

Volume: 150

Pages: 518-536

Print publication date: 01/03/2025

Online publication date: 06/02/2025

Acceptance date: 01/02/2025

Date deposited: 07/04/2025

ISSN (print): 0899-8256

ISSN (electronic): 1090-2473

Publisher: Academic Press

URL: https://doi.org/10.1016/j.geb.2025.01.011

DOI: 10.1016/j.geb.2025.01.011

Data Access Statement: Data will be made available on request.

Altmetrics

Share