Volunteering and the Strategic Value of Ignorance

CESifo Working Paper No. 3419

Volunteering and the Strategic Value of Ignorance

Abstract

Private provision of public goods often takes place as a war of attrition: individuals wait until
someone else volunteers and provides the good. After a certain time period, however, one
individual may be randomly selected. If the individuals are uncertain about their cost of
provision, but can find out about this cost ahead of the volunteering game, a strategic value is
attached to the information, and individuals may prefer not to learn their cost of provision. If
the time horizon is sufficiently short, in equilibrium only one individual may acquire
information about his cost. For a long time horizon, acquiring information is strictly
dominant. The time limit is an important instrument in influencing the efficiency of the
volunteering game.

JEL-Code: H410, D440, D820, D830.

Keywords: war of attrition, volunteering, discrete public goods, asymmetric information,
information acquisition.

Florian Morath

Max Planck Institute for Tax Law and Public Finance
Department of Public Economics
Marstallplatz 1

80539 Munich

Germany

[email protected]

March 29, 2011

I thank Kai Konrad, Michael Michael, Johannes Münster, and participants in the IIPF
conference in Uppsala and in the CESifo Area Conference on Applied Microeconomics for
valuable comments. Financial support by the German Research Foundation (DFG) through
grant SFB/TR 15 is gratefully acknowledged.

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