Al Slivinski

Toilet cleaning and department chairing: Volunteering a public service

Abstract Who will do a job that nobody wants but that someone has to do? The search for a volunteer is modelled as a war of attrition in which everyone is tempted to just wait for someone else to do it. We show that the volunteer will be, ceteris paribus, the individual for whom the benefit/cost ratio of performing the public service is largest, the one most impatient to consume it, or the one who stands to benefit from it the longest.

Volunteering nonprofit entrepreneurial services

Abstract Which member of a heterogeneous population will volunteer to provide the entrepreneurial services needed to found a nonprofit firm to privately provide a public good? We develop a model of this decision. The model predicts that nonprofit entrepreneurs will be those who incur relatively low private costs, or get a relatively high private payoff. Less obviously, they will tend to have a high discount rate and relatively long time horizons, either due to their youth, or due to their consideration of generations to come far into the future. If the public good is one which individuals tend to contribute large amounts to, such entrepreneurs will tend to be relatively wealthy. If private contributions to the firm are relatively small, the entrepreneur is more likely to come from the center of the wealth distribution.

Team Incentives and Organizational Form

Conventional wisdom regarding nonprofit firms is that they are inefficient, due to the absence of a profit motive. However, the costs and product quality realized by profit-taking firms is determined by how well those firms deal with a host of internal incentive and information issues. A similar approach to the study of nonprofit organizations has not been attempted. This paper undertakes such an investigation, centered on the problem of providing incentives for members of a team to provide efficient effort. Holmstrom(1982) showed that the introduction of a budget-breaker, or principal, into a team allowed for the provision of such incentives where it would otherwise be impossible. A similar result obtains for a nonprofit team, but the role of principal differs from that found in profit-taking teams. It is shown that any of; donors, government regulators, or Trustees can fulfill this role in a nonprofit team. One implication of this is that nonprofit firms may indeed pay employees less than otherwise identical employees filling identical posts in profit-taking firms.

The Public Goods Theory Revisited

Professor Kingma has presented us with a useful retrospective on Burton Weisbrod’ influential 1975 paper and some of the work that followed from it. My aim in this set of comments is to provide an alternative perspective on some of that work, and to point out an additional literature, which I think can be considered a legitimate heir to the Weisbrod work, and which the Kingma retrospective neglects.

Bergson social welfare functions in applied welfare analysis

Characterizations of the orderings induced on a set of alternatives by often-used Bergson Social Welfare Functions are provided. The characterizations are particularly useful in applied welfare analysis, because they are formulated entirely in terms of orderings of alternatives, rather than orderings of utilities, as is typically done.