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Free Riding on Altruism and Group Size

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  • Hindriks, Jean
  • Pancs, Romans

Abstract

It is shown that altruism does not affect the equilibrium provision of public goods although altruism takes the form of unconditional commitment to contribute. The reason is that altruistic contributions completely crowd out selfish voluntary contributions. That is, egoists free ride on altruism. It is also shown that public goods are less likely to be provided in larger groups. The only qualification to our results is when the probability of altruism is so high that it is a dominant strategy for all egoistic players to free ride. In this case, actually, both altruism and the larger group facilitate public good provision. Copyright 2002 by Blackwell Publishing Inc.

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Article provided by Association for Public Economic Theory in its journal Journal of Public Economic Theory.

Volume (Year): 4 (2002)
Issue (Month): 3 ()
Pages: 335-46

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Handle: RePEc:bla:jpbect:v:4:y:2002:i:3:p:335-46

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  1. Palfrey, Thomas R. & Rosenthal, Howard, 1984. "Participation and the provision of discrete public goods: a strategic analysis," Journal of Public Economics, Elsevier, Elsevier, vol. 24(2), pages 171-193, July.
  2. Bliss, Christopher & Nalebuff, Barry, 1984. "Dragon-slaying and ballroom dancing: The private supply of a public good," Journal of Public Economics, Elsevier, Elsevier, vol. 25(1-2), pages 1-12, November.
  3. Andreoni, James, 1988. "Privately provided public goods in a large economy: The limits of altruism," Journal of Public Economics, Elsevier, Elsevier, vol. 35(1), pages 57-73, February.
  4. Palfrey, Thomas R. & Rosenthal, Howard, 1988. "Private incentives in social dilemmas : The effects of incomplete information and altruism," Journal of Public Economics, Elsevier, Elsevier, vol. 35(3), pages 309-332, April.
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Cited by:
  1. Makris, Miltiadis, 2009. "Private provision of discrete public goods," Games and Economic Behavior, Elsevier, Elsevier, vol. 67(1), pages 292-299, September.
  2. Jayson Lusk & Tomas Nilsson & Ken Foster, 2007. "Public Preferences and Private Choices: Effect of Altruism and Free Riding on Demand for Environmentally Certified Pork," Environmental & Resource Economics, European Association of Environmental and Resource Economists, European Association of Environmental and Resource Economists, vol. 36(4), pages 499-521, April.
  3. Gerlinde Fellner & Magdalena Margreiter & Nuria Oses Eraso, 2003. "When the past is present – The ratchet effect in the local commons," Papers on Strategic Interaction, Max Planck Institute of Economics, Strategic Interaction Group 2003-23, Max Planck Institute of Economics, Strategic Interaction Group.
  4. Rainer Bartel, 2007. "Der öffentliche Sektor in der Defensive," Wirtschaft und Gesellschaft - WuG, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik, vol. 33(2), pages 199-230.

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