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Heterogeneity, returns to scale, and collective action

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  • Alexander Karaivanov

Abstract

I analyze the effects of resource inequality and valuation heterogeneity on the provision of public goods with increasing or decreasing returns to scale in production. The existing literature typically takes the agents' characteristics as given and known to the researcher. In contrast, this paper compares collective action provision across groups of agents with resources and valuations for the public good drawn from different known joint distributions. Specifically, I characterize the expected equilibrium public good level as function of various distributional properties and moments. A resource‐valuation distribution that first‐order stochastically dominates another distribution always results in higher expected public good provision level, independent of the production technology. With decreasing returns to scale in the public good production, higher resource inequality results in higher expected provision. With increasing returns the same result holds when the mean resource level is relatively low, but expected provision decreases in inequality when the mean resource level is high. A parallel result holds for agents' valuations. L’auteur analyse les effets de l’inégalité des ressources et de l’hétérogénéité dans l’évaluation de biens publics dont la production se fait avec des rendements croissants et décroissants à l’échelle. La littérature spécialisée suggère habituellement que les caractéristiques des agents sont données et connues du chercheur. A contrario, ce mémoire compare l’action collective de groupes d’agents dont les ressources et les évaluations du bien public sont tirées de distributions conjointes connues. Spécifiquement, le niveau d’équilibre anticipé du bien public est fonction de divers moments et propriétés de ces distributions. Une distribution conjointe ressources‐évaluations qui en domine une autre (au sens stochastique de premier ordre) résulte toujours en un niveau de bien public anticipé plus élevé, quelle que soit la technologie de production. Quand les rendements à l’échelle sont décroissants, une inégalité de ressources plus grande résulte en un niveau de bien public anticipé plus élevé. Quand les rendements sont croissants, le même résultat s’ensuit si le niveau moyen de la ressource est relativement bas, mais le niveau de bien public anticipé décroît quand le niveau moyen de la ressource est élevé. Des résultats parallèles sont notés pour ce qui est des évaluations du bien public par les agents.

Suggested Citation

  • Alexander Karaivanov, 2009. "Heterogeneity, returns to scale, and collective action," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 42(2), pages 771-807, May.
    • Handle: RePEc:wly:canjec:v:42:y:2009:i:2:p:771-807
    DOI: 10.1111/j.1540-5982.2009.01527.x
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    3. Richard Cornes & Roger Hartley & Yuji Tamura, 2019. "Two‐Aggregate Games: Demonstration Using a Production–Appropriation Model," Scandinavian Journal of Economics, Wiley Blackwell, vol. 121(1), pages 353-378, January.
    4. Bhim Adhikari & Jon Lovett, 2006. "Institutions and collective action: Does heterogeneity matter in community-based resource management?," Journal of Development Studies, Taylor & Francis Journals, vol. 42(3), pages 426-445.
    5. Lu, Peng, 2016. "Predicting peak of participants in collective action," Applied Mathematics and Computation, Elsevier, vol. 274(C), pages 318-330.
    6. Rucha Ghate & Suresh Ghate & Elinor Ostrom, "undated". "Indigenous Communities, Cooperation, and Communication: Taking Experiments to the Field," Working papers 64, The South Asian Network for Development and Environmental Economics.
    7. Ridhima Gupta, "undated". "Causes of Emissions from Agricultural Residue Burning in North-west India: Evaluation of a Technology Policy Response," Working papers 66, The South Asian Network for Development and Environmental Economics.
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    9. Nancy McCarthy & Talip Kilic, 2015. "The nexus between gender, collective action for public goods and agriculture: evidence from Malawi," Agricultural Economics, International Association of Agricultural Economists, vol. 46(3), pages 375-402, May.
    10. Priya Shyamsundar & Rucha Ghate, "undated". "Rights, Responsibilities and Resources: Examining Community Forestry in South Asia," Working papers 59, The South Asian Network for Development and Environmental Economics.
    11. Marcus Wangel & Hans Blomkvist, 2013. "Rural Forest Management in Sierra Leone: The Role of Economic (In)Equality in Facilitating Collective Action," Journal of Development Studies, Taylor & Francis Journals, vol. 49(11), pages 1564-1578, November.
    12. Yamini Gupt, "undated". "Is the Deposit Refund System for Lead Batteries in Delhi and the National Capital Region Effective?," Working papers 68, The South Asian Network for Development and Environmental Economics.
    13. Prasenjit Sarkhel, "undated". "Examining Private Participation in Embankment Maintenance in the Indian Sundarbans," Working papers 75, The South Asian Network for Development and Environmental Economics.
    14. Naveen Adhikari, "undated". "Measuring Health Benefits from Air Pollution Reduction in Kathmandu Valley," Working papers 70, The South Asian Network for Development and Environmental Economics.
    15. Bhim Adhikari, 2007. "Property Rights and Natural Resources: Socio-Economic Heterogeneity and Distributional Implications of Common Property Resource Management," Working Papers id:840, eSocialSciences.

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    More about this item

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis

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