02264cam a22002657 4500001000700000003000500007005001700012008004100029100002300070245012700093260006600220490004200286500001600328520111300344530006101457538007201518538003601590690010801626690006201734700002401796700002101820710004201841830007701883856003801960w17926NBER20140425043256.0140425s2012 mau||||fs|||| 000 0 eng d1 aBattaglini, Marco.14aThe Free Rider Problemh[electronic resource]:ba Dynamic Analysis /cMarco Battaglini, Salvatore Nunnari, Thomas Palfrey. aCambridge, Mass.bNational Bureau of Economic Researchc2012.1 aNBER working paper seriesvno. w17926 aMarch 2012.3 aWe present a dynamic model of free riding in which n infinitely lived agents choose between private consumption and contributions to a durable public good g. We characterize the set of continuous Markov equilibria in economies with reversibility, where investments can be positive or negative; and in economies with irreversibility, where investments are non negative and g can only be reduced by depreciation. With reversibility, there is a continuum of equilibrium steady states: the highest equilibrium steady state of g is increasing in n, and the lowest is decreasing. With irreversibility, the set of equilibrium steady states converges to a unique point as depreciation converges to zero: the highest steady state possible with reversibility. In both cases, the highest steady state converges to the efficient steady state as agents become increasingly patient. In economies with reversibility there are always non-monotonic equilibria in which g converges to the steady state with damped oscillations; and there can be equilibria with no stable steady state, but a unique persistent limit cycle. aHardcopy version available to institutional subscribers. aSystem requirements: Adobe [Acrobat] Reader required for PDF files. aMode of access: World Wide Web. 7aD78 - Positive Analysis of Policy Formulation and Implementation2Journal of Economic Literature class. 7aH41 - Public Goods2Journal of Economic Literature class.1 aNunnari, Salvatore.1 aPalfrey, Thomas.2 aNational Bureau of Economic Research. 0aWorking Paper Series (National Bureau of Economic Research)vno. w17926.4 uhttp://www.nber.org/papers/w17926