On the efficient provision of public goods by means of biased lotteries: The two player case

•Biased lotteries can be used to achieve the efficient outcome in public good provision games.•We characterize the minimal prize sum for the lottery necessary to implement the first-best.•The minimal prize sum behaves non-monotonically as a function of consumers' heterogeneity.

In this paper we analyze how biased lotteries can be used to overcome the free-riding problem in voluntary public good provision. We characterize the optimal combinations of bias and lottery prize and the conditions that guarantee efficient public good provision in equilibrium.