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Coordinating Public Good Provision by Mediated Communication†

Coordinating Public Good Provision by Mediated Communication† AbstractWe 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. (JEL D82, D83, H41, H84) http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png American Economic Journal: Microeconomics American Economic Association

Coordinating Public Good Provision by Mediated Communication†

Coordinating Public Good Provision by Mediated Communication†

American Economic Journal: Microeconomics , Volume 13 (2) – May 1, 2021

Abstract

AbstractWe 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. (JEL D82, D83, H41, H84)

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Publisher
American Economic Association
Copyright
Copyright © 2021 © American Economic Association
ISSN
1945-7685
DOI
10.1257/mic.20180272
Publisher site
See Article on Publisher Site

Abstract

AbstractWe 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. (JEL D82, D83, H41, H84)

Journal

American Economic Journal: MicroeconomicsAmerican Economic Association

Published: May 1, 2021

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