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Group size paradox and public goods

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  • Bag, Parimal Kanti
  • Mondal, Debasis

Abstract

In an economy with voluntarily provided public goods and private product varieties, and a general class of CES preferences, it is shown that aggregate public good contribution follows an inverted-U pattern with respect to group size when private and public goods are substitutable in preferences. With complementarity, however, aggregate provision grows monotonically with group size.

Suggested Citation

  • Bag, Parimal Kanti & Mondal, Debasis, 2014. "Group size paradox and public goods," Economics Letters, Elsevier, vol. 125(2), pages 215-218.
    • Handle: RePEc:eee:ecolet:v:125:y:2014:i:2:p:215-218
    DOI: 10.1016/j.econlet.2014.09.012
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    References listed on IDEAS

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    1. Chamberlin, John, 1974. "Provision of Collective Goods As a Function of Group Size," American Political Science Review, Cambridge University Press, vol. 68(2), pages 707-716, June.
    2. Furusawa, Taiji & ,, 2011. "Contributing or free-riding? Voluntary participation in a public good economy," Theoretical Economics, Econometric Society, vol. 6(2), May.
    3. Krugman, Paul, 1980. "Scale Economies, Product Differentiation, and the Pattern of Trade," American Economic Review, American Economic Association, vol. 70(5), pages 950-959, December.
    4. Paul Pecorino, 2009. "Public goods, group size, and the degree of rivalry," Public Choice, Springer, vol. 138(1), pages 161-169, January.
    5. Bergstrom, Theodore & Blume, Lawrence & Varian, Hal, 1986. "On the private provision of public goods," Journal of Public Economics, Elsevier, vol. 29(1), pages 25-49, February.
    6. Paul Pecorino, 2009. "Monopolistic Competition, Growth and Public Good Provision," Economic Journal, Royal Economic Society, vol. 119(534), pages 298-307, January.
    7. Martin McGuire, 1974. "Group size, group homo-geneity, and the aggregate provision of a pure public good under cournot behavior," Public Choice, Springer, vol. 18(1), pages 107-126, June.
    8. Andreoni, James, 1988. "Privately provided public goods in a large economy: The limits of altruism," Journal of Public Economics, Elsevier, vol. 35(1), pages 57-73, February.
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    Cited by:

    1. Takuma Wakayama & Takehiko Yamato, 2023. "Comparison of the voluntary contribution and Pareto-efficient mechanisms under voluntary participation," International Journal of Game Theory, Springer;Game Theory Society, vol. 52(2), pages 517-553, June.
    2. Paul Pecorino, 2013. "Monopolistic Competition and Public Good Provision with By‐product Firms," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 22(4), pages 875-893, December.
    3. Debasis Mondal, 2015. "Private provision of public good and immiserizing growth," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 45(1), pages 29-49, June.
    4. Masatoshi Yoshida & Stephen J. Turnbull & Mitsuru Ota, 2023. "Environmental offsets and production externalities under monopolistic competition," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 30(2), pages 305-325, April.
    5. Masatoshi Yoshida & Stephen J. Turnbull, 2021. "Voluntary provision of environmental offsets under monopolistic competition," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 28(4), pages 965-994, August.

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    More about this item

    Keywords

    Public good; Group size; Monopolistic competition; General equilibrium; Partial equilibrium;
    All these keywords.

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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