Private investment with social benefits under uncertainty: The dark side of public financing
Autor: | Marco Buso, Kene Boun My, Giuseppe Attanasi, Anne Stenger |
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Přispěvatelé: | Groupe de Recherche en Droit, Economie et Gestion (GREDEG), Centre National de la Recherche Scientifique (CNRS)-Université Nice Sophia Antipolis (... - 2019) (UNS), Université Côte d'Azur (UCA)-Université Côte d'Azur (UCA), Bureau d'Économie Théorique et Appliquée (BETA), Institut National de la Recherche Agronomique (INRA)-Centre National de la Recherche Scientifique (CNRS)-Université de Lorraine (UL)-Université de Strasbourg (UNISTRA), University of Padua, Institut National de la Recherche Agronomique (INRA), CODIREM, Université Nice Sophia Antipolis (... - 2019) (UNS), COMUE Université Côte d'Azur (2015-2019) (COMUE UCA)-COMUE Université Côte d'Azur (2015-2019) (COMUE UCA)-Centre National de la Recherche Scientifique (CNRS)-Université Côte d'Azur (UCA), Lille économie management - UMR 9221 (LEM), Université d'Artois (UA)-Université catholique de Lille (UCL)-Université de Lille-Centre National de la Recherche Scientifique (CNRS), Université de Strasbourg (UNISTRA)-Université de Lorraine (UL)-Centre National de la Recherche Scientifique (CNRS)-Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement (INRAE), Universita degli Studi di Padova, Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement (INRAE), ANR-12-AGRO-0007,FOR-WIND,Adaptation sylvicole et économique de l'aménagement forestier au risque vent(2012), ANR-18-CE26-0018,GrICRiS,L'innovation verte: Créativité, Risque et Contexte social(2018), COMUE Université Côte d'Azur (2015 - 2019) (COMUE UCA)-COMUE Université Côte d'Azur (2015 - 2019) (COMUE UCA)-Centre National de la Recherche Scientifique (CNRS), Université Côte d'Azur (UCA)-Université Côte d'Azur (UCA)-Centre National de la Recherche Scientifique (CNRS), Institut National de la Recherche Agronomique (INRA)-Université de Strasbourg (UNISTRA)-Université de Lorraine (UL)-Centre National de la Recherche Scientifique (CNRS), Université Nice Sophia Antipolis (1965 - 2019) (UNS), AgroParisTech-Université de Strasbourg (UNISTRA)-Université de Haute-Alsace (UHA) Mulhouse - Colmar (Université de Haute-Alsace (UHA))-Université de Lorraine (UL)-Centre National de la Recherche Scientifique (CNRS)-Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement (INRAE), Università degli Studi di Padova = University of Padua (Unipd) |
Jazyk: | angličtina |
Rok vydání: | 2019 |
Předmět: |
Economics and Econometrics
Sociology and Political Science benefit sharing Moral hazard Control (management) Settore SECS-P/06 - ECONOMIA APPLICATA Discount points Microeconomics crowding out 0502 economics and business Economics cost sharing Settore SECS-P/03 - SCIENZA DELLE FINANZE 050207 economics public-private contribution Government Public Private Partnership Actuarial science [QFIN]Quantitative Finance [q-fin] 05 social sciences uncertain benefits laboratory experiment Investment (macroeconomics) [SHS.ECO]Humanities and Social Sciences/Economics and Finance moral hazard Climate change mitigation climate change Public funding 13. Climate action privately-provided adaptation public good General partnership Private-public contribution 050206 economic theory Finance Cost-sharing public intervention Public finance |
Zdroj: | Journal of Public Economic Theory Journal of Public Economic Theory, Wiley, In press, pp.1-52. ⟨10.1111/jpet.12358⟩ Journal of Public Economic Theory, Wiley, 2020, 22 (3), pp.769-820. ⟨10.1111/jpet.12358⟩ Journal of Public Economic Theory, 2020, 22 (3), pp.769-820. ⟨10.1111/jpet.12358⟩ |
ISSN: | 1097-3923 1467-9779 |
DOI: | 10.1111/jpet.12358⟩ |
Popis: | In this paper we first develop a theoretical model characterized by sequential activities (initial investment and management effort) and moral hazard. The game is an interaction between two agents: the first is in charge of the two tasks that imply a cost and an uncertain ex-post benefit (private agent); the second can decide whether or not to financially contribute on the two activities knowing that the size and the probability to attain a higher surplus ex-post depend on the first agent actions (public agent). In the second part we test our model through an experiment. On the one hand, the study confirms the main results of the model related to the most efficient type and timing of government contribution to the project. On the other hand, we discover that, even in the absence of a direct link between the public contribution and the second stage of the game, the private agent strategically decide to decrease the level of effort during the second period with the aim of penalizing the public actor in the case of a low level of contribution. This behavioral result is interesting from a theoretical point of view, but even more in terms of policy implications. In fact, many investment in innovation or in climate change mitigation/adaptation are characterized by an initial investment and uncertain outcomes that depend on the management/development stage. With our study we demonstrate that a public contribution to finance the investment is not sufficient, and it can also be detrimental for what concerns the management stage and as a consequence the probability of success. What we suggest is a more interactive partnership between public and private agents that affects not just the level of investment, but it involves a more strict relation and public control in the long-term. |
Databáze: | OpenAIRE |
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