A voluntary participation game with a non-excludable public good

In the previous mechanism design on public goods, it was implicitly assumed that every agent must participate in the mechanism that the designer provides. This approach neglects non-excludability of public goods. We explicitly incorporate non-excludability and examine a two-stage game with voluntary participation: In the first stage, each agent simultaneously decides whether she participates ill the mechanism or not, and in the second stage, knowing the other agents' participation decisions, the agents who selected participation in the first stage choose their strategies. Participation of all agents is not an equilibrium in many situations. Journal of Economic Literature Classification Numbers: C72, D71, D78, H41. (C) 1999 Academic Press.