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Volunteering and the Strategic Value of Ignorance


Autor: 

Morath, Florian

Many public goods are provided by the effort of a single individual; examples include intervening in a fight, household chores, and mythical dragon-slaying. Such situations are often best described by a war of attrition: One volunteer is needed for a certain task, and everyone prefers someone else to volunteer first and bear the cost of provision of the public good. Typically, there is a disutility or waiting cost attached to the time until a volunteer is found.

Often the individuals don't know exactly how costly volunteering will turn out. They may, for instance, only have a guess about the time and cost involved in dragon-slaying, chairing a university department, or organizing a social event, but can acquire information about this expenditure of time. Also, individuals may not be able to wait an indefinite amount of time until someone volunteers, but, in many situations the volunteering game has a finite time horizon.

Florian Morath studies the individuals' incentives to obtain information about their own cost of provision of the public good ahead of a volunteering game (war of attrition). He shows that the individuals attach a strategic value to the information: They may prefer to remain uninformed and not learn their cost of provision. Not having too much information about losses in sales and the consequences for employment, for example, may help unions engaged in labor strikes to show a more aggressive behavior in the negotiations.

In equilibrium, only one individual may acquire information about his cost if the time horizon is sufficiently short. For a long time horizon, acquiring information is strictly dominant, and both individuals prefer to find out about their costs of provision. The time limit is an important instrument in influencing the efficiency of the volunteering game.

Veröffentlichung:   Social Choice and Welfare, 2013, 41(1), S. 99-131.