Multiple Public Goods and Lottery Fund Raising

Abstract

Using analytical and experimental methods, this paper examines the extent to which targeted self-funding lotteries described by Morgan ((2000). Review of Economic Studies, 67(234), 761–784) improve social welfare in an environment with multiple public goods. Social welfare improves relative to the Nash prediction, when a single lottery is used to support provision of any socially desirable public good. However, social welfare is maximized if the lottery funds only the most socially desirable public good. Experimental results show that a lottery can fund a less socially desirable public good, but that efficiency declines as lottery ticket purchases crowd out voluntary contributions made in the absence of lotteries.

Citation

Moir, R. (2006), "Multiple Public Goods and Lottery Fund Raising", Isaac, R.M. and Davis, D.D. (Ed.) Experiments Investigating Fundraising and Charitable Contributors (Research in Experimental Economics, Vol. 11), Emerald Group Publishing Limited, Leeds, pp. 121-142. https://doi.org/10.1016/S0193-2306(06)11005-4