An introduction to the second special issue commemorating works of James Andreoni, Theodore Bergstrom, Larry Blume, and Hal Varian

• Author: Myrna Wooders,Ernesto Reuben,John Wooders,Olivier Bochet,Nikos Nikiforakis
• Published date: 01 April 2020
• Date: 01 April 2020
• DOI: http://doi.org/10.1111/jpet.12435

J Public Econ Theory. 2020;22:279–284. wileyonlinelibrary.com/journal/jpet © 2020 Wiley Periodicals, Inc.

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279

Received: 26 February 2020

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Accepted: 26 February 2020

DOI: 10.1111/jpet.12435

INTRODUCTION

An introduction to the second special issue

commemorating works of James Andreoni,

Theodore Bergstrom, Larry Blume, and Hal

Varian

Olivier Bochet

1

|Nikos Nikiforakis

1

|Ernesto Reuben

1

|

John Wooders

1

|Myrna Wooders

1,2

1

Division of Social Science, New York University—Abu Dhabi, Abu Dhabi, United Arab Emirates

2

Department of Economics, Vanderbilt University, Nashville, Tennessee

Correspondence

Myrna Wooders, Department of Economics, Vanderbilt University, Nashville, TN 37235-1819

Email: myrna.wooders@gmail.com

This special issue, and Issue 5, Volume 21, of the Journal of Public Economic Theory com-

memorate 30 years since the publication of three path‐breaking contributions to public eco-

nomic theory and to economics more generally: Bergstrom, Blume, and Varian's “On the

private provision of public goods”(Bergstrom, Blume & Varian, 1986), well known in public

economics as “BBV”, and Andreoni's “Why free ride? Strategies and learning in public goods

experiments”(Andreoni, 1988a) and “Privately provided public goods in a large economy: The

limits of altruism”(Andreoni, 1988b). The voluntary contributions game model of BBV played a

major role in the beginnings of game theory as a central part of the concepts and techniques of

public economic theory. The two papers by Andreoni led the way in the introduction of be-

havioral public economics and heralded the important area that it has become. Issue 5, Volume

21 of JPET began with a survey of James Andreoni's two papers and their impact. This issue

begins with a survey of some of the research arising from BBV.

One of the very central results of public economics, due to Warr (1983) and extended by

Bergstrom, Blume, and Varian (1986) to a voluntary contributions game, is that the total level of

contributions to provision of a public good is unaffected by any reallocation of income among

contributing consumers that leaves the set of contributors unchanged. The elegant, yet simple,

model of BBV assumes quasi‐linear preferences and one private good; providing it does not change

the set of contributors, a transfer of income among contributing consumers induces those receiving

income to raise their contributions to the public good, and that this increase is exactly offset by a

reduction in contributions of those losing income; that is such transfers are neutral.Theexactoffset

is a consequence of the individual rationality conditions for Nash equilibrium of the voluntary

contributions game. Unlike the contribution of Warr, BBV's arguments rest on first principles.

In their contribution to this special issue, Faias, Moreno‐García, and Myles (2020) discuss

some of the extensions and applications of the BBV model. The BBV analysis has been extended

to models with multiple private and public goods, largely with the aim of relaxing conditions of