Abstracts: We study voluntary contributions to a threshold public good by two players who learn about their private valuations through private signals. Only bad signals can arrive. The absence of signals makes players increasingly optimistic about their own valuations, whereas a prolonged history of no contribution makes them increasingly pessimistic about the other player’s willingness to contribute. We characterize the unique symmetric perfect Bayesian equilibrium. We show that equilibrium behavior evolves from waiting to partial contribution and ultimately to full contribution by a single player. Private-value learning can eventually eliminate free-riding in the private provision of public goods.

Abstracts:  In most cases, society is indifferent to the specific order in which homogeneous customers are served in a queue. Hence, it is only the server who may benefit from selling priority service, and the revenue from such activity comes at the expense of reduced consumer surplus. In this work, we show that when strategic customers are faced with an additional decision, on top of whether to pay for priority service, selling priority service by revenue-maximizing servers may not only improve social welfare but even maximize it in some cases. We exemplify this principle by studying two models. In the first, a monopolistic server charges for priority while customers decide whether to join the queue, and if they do, whether to pay for priority. In the second, multiple revenue-maximizing servers compete on the priority service price, while customers decide which queue to join and whether to pay for priority at the queue they join.