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To link to full-text access for this article, visit this link: http://dx.doi.org/10.1016/j.jpubeco.2007.04.001 Byline: John Duffy, Jack Ochs, Lise Vesterlund Keywords: Dynamic public goods game; Voluntary contribution mechanism; Information; Reciprocity Abstract: Charitable contributions are frequently made over time. Donors are free to contribute whenever they wish and as often as they want, and are frequently updated on the level of contributions by others. A dynamic structure enables donors to condition their contribution on that of others, and, as Schelling [Schelling, Thomas C., The Strategy of Conflict Cambridge, MA: Harvard University Press, 1960.] suggested, it may establish trust thereby increasing charitable giving. Marx and Matthews [Marx, Leslie, and Steven Matthews, 'A Dynamic Voluntary Contribution to a Public Project,' Review of Economic Studies, 67, 2000, 327-358.] build on Schelling's insight and show that multiple contribution rounds may secure a provision level that cannot be achieved in the static, one-shot setting, but only if there is a discrete, positive payoff jump upon completion of the project. We examine these two hypotheses experimentally using static and dynamic public good games. We find that contributions are indeed higher in the dynamic than in the static game. However, in contrast to the predictions, the increase in contributions in the dynamic game does not depend critically on the existence of a completion benefit jump or on whether players can condition their decisions on the behavior of other members of their group. Author Affiliation: Department of Economics, University of Pittsburgh, Pittsburgh, PA 15260, United States Article History: Received 29 August 2006; Revised 10 April 2007; Accepted 10 April 2007 Article Note: (footnote) [star] We acknowledge support from the National Science Foundation. We thank Jared Lunsford, Ernest Kong-Wah Lai, and in particular Scott Kinross for invaluable research assistance. We are grateful to the editor and an anonymous referee for their helpful comments. Vesterlund thanks CEBR at Copenhagen Business School for their hospitality.

This paper analyzes an extension of a model of production and predation due to Grossman (1998) to a multiple community setting. In a multiple community setting, defense expenditures in any one community have the property of a local public good. Such expenditures produce effects on other communities. These effects include changes in the distribution of population among communities, the redistribution of predatory effort over communities, and an induced change in the predator/producer ratio in the economy as a whole. The question we address is whether the level of defense chosen by local governments so as to maximize the per capita consumption of their own producers, given defense levels elsewhere, always produces a second-best outcome. Our analysis shows that if the number of communities is fixed, fully rational local government decision-making leads to the same level of defense activity and equilibrium per capita consumption as would be chosen by a central planner. However, if individual local governments are boundedly rational, in the sense that they do not anticipate the effects of their own defense activity on the equilibrium predator/producer ratio and distribution of producer activity, then competition among local governments never achieves a first-best outcome. Furthermore, the equilibrium associated with competition among boundedly rational local governments can sometimes yield a lower consumption per capita in equilibrium than would be achieved if there were no local governments and each agent who chose to be a producer also chose his/her own level of defense. [ABSTRACT FROM AUTHOR]

Summary The estimation of the value of recreation benefits resulting from improved water quality is required for many purposes. In particular, the Water Pollution Control Act of 1980 requires the consideration of the reasonableness of costs of reducing water pollution in relation to benefits to be derived from establishing effluent standards (Clean Water Act of 1977). Recreation is often the most important benefit resulting from water quality improvement. Current methods used to calculate recreation benefits are either not site-specific or are expensive and controversial. This paper presents a relatively simple, inexpensive, and less controversial method of calculating site-specific recreation benefits resulting from improved water quality. It does this by producing an upper bound estimate which often is adequate for the relevant decision. The upper bound estimates is based on two assumptions: 1) there are alternative equivalent substitute sites for the newly augmented water quality site, and 2) the new augmented recreation opportunities at the site will be used to their maximum supply capacity. Clearly, if an upper bound benefit estimate in a cost-benefit ratio does not produce a favorable ratio, no other benefit estimate will. In cases where this estimate produces an ambiguous result resort must be had to other more precise methods of estimation. [ABSTRACT FROM AUTHOR]

Examines the application of linear programming in solving the urban planning problem of the transportation industry in the U.S. Determination on the land use projection; Distribution of residential activity; Allocation of the pricing scheme for the transport system.