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Public goods in networks with constraints on sharing

Author

Listed:
  • Gerke, Stefanie
  • Gutin, Gregory
  • Hwang, Sung-Ha
  • Neary, Philip R.

Abstract

This paper considers incentives to provide goods that are partially shareable along social links. We introduce a model in which each individual in a social network not only decides how much of a shareable good to provide, but also decides which subset of neighbours to nominate as co-beneficiaries. An outcome of the model specifies an endogenously generated subnetwork and a public goods game occurring over the realised subnetwork. We prove the existence of specialised pure strategy Nash equilibria: those in which some individuals contribute while the remaining individuals free ride. We then consider how the set of efficient specialised equilibria vary as the constraints on sharing are relaxed and we show that, paradoxically, an increase in shareability may decrease efficiency.

Suggested Citation

  • Gerke, Stefanie & Gutin, Gregory & Hwang, Sung-Ha & Neary, Philip R., 2024. "Public goods in networks with constraints on sharing," Journal of Economic Theory, Elsevier, vol. 219(C).
    • Handle: RePEc:eee:jetheo:v:219:y:2024:i:c:s0022053124000504
    DOI: 10.1016/j.jet.2024.105844
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    References listed on IDEAS

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    More about this item

    Keywords

    Networks; Public good provision; Constrained sharing; Endogenous network formation;
    All these keywords.

    JEL classification:

    • D00 - Microeconomics - - General - - - General
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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