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Public goods in networks with constraints on sharing

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  • Stefanie Gerke
  • Gregory Gutin
  • Sung-Ha Hwang
  • Philip Neary

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 of the original network 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.

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  • Stefanie Gerke & Gregory Gutin & Sung-Ha Hwang & Philip Neary, 2019. "Public goods in networks with constraints on sharing," Papers 1905.01693, arXiv.org, revised Jun 2023.
    • Handle: RePEc:arx:papers:1905.01693
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    References listed on IDEAS

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    1. Foster, Andrew D & Rosenzweig, Mark R, 1995. "Learning by Doing and Learning from Others: Human Capital and Technical Change in Agriculture," Journal of Political Economy, University of Chicago Press, vol. 103(6), pages 1176-1209, December.
    2. Jackson, Matthew O. & Wolinsky, Asher, 1996. "A Strategic Model of Social and Economic Networks," Journal of Economic Theory, Elsevier, vol. 71(1), pages 44-74, October.
    3. Jack Hirshleifer, 1983. "From weakest-link to best-shot: The voluntary provision of public goods," Public Choice, Springer, vol. 41(3), pages 371-386, January.
    4. Bramoulle, Yann & Kranton, Rachel, 2007. "Public goods in networks," Journal of Economic Theory, Elsevier, vol. 135(1), pages 478-494, July.
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    Cited by:

    1. Gregory Gutin & Philip R Neary & Anders Yeo, 2020. "Exact capacitated domination: on the computational complexity of uniqueness," Papers 2003.07106, arXiv.org, revised Jul 2022.
    2. Gregory Gutin & Tomohiro Hirano & Sung-Ha Hwang & Philip R. Neary & Alexis Akira Toda, 2021. "The effect of social distancing on the reach of an epidemic in social networks," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 16(3), pages 629-647, July.

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