Debate: Goods,Games,and Institutions—Part 1

Abstract

“Goods, Games, and Institutions” (Aggarwal and Dupont, 1999) models the provision of a public good in a static, simultaneous-move game. The authors allow for strategies where each player's action depends on what the rival does, which by the simultaneous-moves assumption it cannot know. Thus, the strategies are invalid, and this analytical flaw renders all main claims in the article invalid. Considering the appropriate strategies shows that if provision of the good is socially desirable and feasible, there are always cost-sharing Nash equilibria in which the good is provided. If the players can vary their levels of contribution, there exists a large number of cost-sharing equilibria with differing welfare characteristics. Within the model, the main role of institutions is not to ensure provision of the good, but to determine the individual cost burden. Lastly, the static normal form game framework is ill suited to capture the salient features of public goods provision in international relations.