Coordinating Public Good Provision by Mediated Communication
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Date
2021
Journal Title
Journal ISSN
Volume Title
Publisher
American Economic Journal: Microeconomics
Abstract
We examine a setup where two agents allocate a fixed budget between public goods in two areas. The agents may be biased to one area, which is their private information. Without communication, the funds are allocated inefficiently, resulting in gaps and duplication in public good provision. Direct communication between the agents is ineffective and cannot resolve the coordination failure even when the potential biases are negligible. Coordination can be improved by a mediator who filters the information communicated by the agents. Our results can throw light on how to improve coordination of humanitarian aid by an appropriately designed information management system.
Description
Keywords
Coordinating, Public Good, Communication
Citation
Halonen-Akatwijuka, M., & Park, I. U. (2021). Coordinating public good provision by mediated communication. American Economic Journal: Microeconomics, 13(2), 311-42.DOI: 10.1257/mic.20180272