On increased risk and the voluntary provision of public goods

This paper examines the impacts of increased risk on the voluntary provision of public goods. I strengthen the view that uncertainty ameliorates free riding even given negative non-Nash conjectures. This result holds since the change in the perceived free riding (i.e., the magnitude of the conjecture) drives voluntary contribution to public good supply. The result has two main implications. First, the traditional model of the rational self-interested individual can explain voluntary contributions. Second, a public policy to encourage volunteerism would maintain private information of private contributions to the supply of public goods. However, risk as a public policy instrument is limited by ethical concerns and behavioral responses to risk.U.S. Environmental Protection Agency provided support for this research. Garey Durden, Todd Sandler, Fred Sterbenz, Robert Sugden, and Joe Kerkvliet provided useful comments. I owe tanks to Peter Bohm, Hans Wijkander, and Charles Mason for encouraging my work in this area. Two referees provided detailed suggestions that greatly improved the paper.