@article{7eb121c4811c44d59283f38f0429b1e0,
title = "Achieving efficiency in dynamic contribution games",
abstract = "We analyze a game in which a group of agents exerts costly effort over time to make progress on a project. The project is completed once the cumulative effort reaches a prespecified threshold, at which point it generates a lump-sum payoff. We characterize a budget-balanced mechanism that induces each agent to exert the first-best effort level as the outcome of a Markov perfect equilibrium, thus eliminating the free-rider problem. We also show how our mechanism can be adapted to other dynamic games with externalities, such as strategic experimentation and the dynamic extraction of a common resource.",
author = "Jak{\v s}a Cvitani{\'c} and George Georgiadis",
note = "Funding Information: We are grateful to Attila Ambrus, Simon Board, Kim Border, Yeon-Koo Che, Larry Kotlikoff, Eddie Lazear, Fei Li, Albert Ma, Niko Matouschek, Moritz Meyer-ter-Vehn, Dilip Mookherjee, Andy Newman, Juan Ortner, Andy Skrzypacz, Chris Tang, Luke Taylor, and Glen Weyl, as well as to seminar audiences at Boston University, Northwestern University (Kellogg), Michigan State University, the University of Pennsylvania, INFORMS 2015, the 2015 Canadian Economic Theory Conference, the Annual 2015 IO Theory Conference, and the 2015 Midwest Economic Theory Conference for numerous comments and suggestions. We thank Maja Kos for excellent editorial assistance. J. Cvitani{\'c} acknowledges support from NSF grant DMS 10-08219.",
year = "2016",
doi = "10.1257/mic.20160018",
language = "English (US)",
volume = "8",
pages = "309--342",
journal = "American Economic Journal: Microeconomics",
issn = "1945-7669",
publisher = "American Economic Association",
number = "4",
}