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Volunteer's Uncertainty Dilemma

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Tragic outcomes in emergency situations are commonly attributed to free-riding incentives. We show that uncertainty about the kind of situation (risky or not) can induce tragic outcomes in emergency situations even when free-riding incentives are absent. In equilibrium, potential volunteers rely on their private signals and the anticipated behavior of others when deciding whether to help. We characterize the equilibria and describe the influence of the likelihood of danger, the signal's quality, and the number of bystanders. We also discuss how policy instruments can align the private and the social incentives to volunteer. (JEL: H23, H41)
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Keywords: social dilemma; uncertainty; volunteer's dilemma

Appeared or available online: 15 March 2018

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