Shlomit Hon-Snir, Department of Economics, The Max Stern Academic College of Emek Yezreel, Emek Yezreel 19300, Israel (email@example.com). Benyamin Shitovitz, Department of Economics, University of Haifa, Haifa 31905, Israel (firstname.lastname@example.org). Menahem Spiegel, Department of Finance and Economics, Rutgers Business School, Newark, NJ 07102 (email@example.com).
Information Advantage in a Public Good Economy with Multiplicative Structure of Utilities
Article first published online: 3 SEP 2012
© 2012 Wiley Periodicals, Inc.
Journal of Public Economic Theory
Volume 14, Issue 5, pages 757–765, October 2012
How to Cite
HON-SNIR, S., SHITOVITZ, B. and SPIEGEL, M. (2012), Information Advantage in a Public Good Economy with Multiplicative Structure of Utilities. Journal of Public Economic Theory, 14: 757–765. doi: 10.1111/j.1467-9779.2012.01560.x
We are grateful to Diego Moreno, Myrna Wooders, the associate editor and the anonymous referee for their helpful comments and suggestions.
- Issue published online: 3 SEP 2012
- Article first published online: 3 SEP 2012
- Received April 28 2010; Accepted November 20, 2010.
This paper extends results on information advantage in Cournot oligopoly to a public good economy with uncertainty and private information where the state-dependent utilities have a multiplicative structure. We show that in a Bayesian–Nash equilibrium where consumers’ contributions are positive in all states of nature, a consumer with superior information is rewarded with a higher ex ante expected utility. Our counter example shows that in the case where one consumer does not contribute, information disadvantage might emerge. Thus, the interiority assumption is essential to obtain our results.