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The Group Size Paradox Revisited

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Author Info
PAUL PECORINO
AKRAM TEMIMI

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Abstract

Esteban and Ray (2001) model an increasing marginal cost of effort in providing a public good. If the marginal cost of contribution function has an elasticity greater than 1, then the level of provision is increasing in group size, regardless of the degree of rivalry of the public good. We modify their model to a standard public goods setting, where their results continue to hold. We then add small fixed costs of participation to the model. If the good is sufficiently rival, one of Olson's (1965) central propositions is restored: public goods will fail to be provided in large groups. Copyright © 2008 Wiley Periodicals, Inc..

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File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/j.1467-9779.2008.00386.x
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Publisher Info
Article provided by Association for Public Economic Theory in its journal Journal of Public Economic Theory.

Volume (Year): 10 (2008)
Issue (Month): 5 (October)
Pages: 785-799
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Handle: RePEc:bla:jpbect:v:10:y:2008:i:5:p:785-799

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  1. Paul Pecorino, 2009. "Public goods, group size, and the degree of rivalry," Public Choice, Springer, vol. 138(1), pages 161-169, January. [Downloadable!] (restricted)
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This page was last updated on 2009-11-22.

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