Reputation and Ownership of Public Goods

Maija Halonen-Akatwijuka (University of Bristol)
Evagelos Pafilis (King's College London)

Abstract: We analyze optimal ownership of public goods in a repeated game. Our focus is on common ownership where an owner’s access to the public good cannot be restricted by other owners. We find that common ownership is optimal when investments are inelastic to surplus share as common ownership maximizes the punishment from deviation. When investments are elastic, the optimal ownership structure minimizes the gain from deviation. Then either joint ownership or single ownership is optimal.