Private Provision of Public Goods and Information Diffusion in Social Groups
AbstractWe describe a model of fundraising in social groups, where private information about quality of provision is transmitted by social proximity. Individuals engage in voluntary provision of a pure collective good that is consumed by both neighbours and non-neighbours. We show that, unlike in the case of private goods, better informed individuals face positive incentives to incur a cost to share information with their neighbours. These incentives are stronger, and provision of the pure public good greater, the smaller are individuals’ social neighbourhoods.
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Bibliographic InfoPaper provided by Competitive Advantage in the Global Economy (CAGE) in its series CAGE Online Working Paper Series with number 47.
Date of creation: 2011
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Private provision of public goods; social learning;
Other versions of this item:
- Scharf, Kimberley Ann, 2011. "Private Provision of Public Goods and Information Diffusion in Social Groups," CEPR Discussion Papers 8607, C.E.P.R. Discussion Papers.
- D6 - Microeconomics - - Welfare Economics
- D7 - Microeconomics - - Analysis of Collective Decision-Making
- H1 - Public Economics - - Structure and Scope of Government
- L3 - Industrial Organization - - Nonprofit Organizations and Public Enterprise
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- Fudenberg, Drew & Ellison, Glenn, 1995.
"Word-of-Mouth Communication and Social Learning,"
3196300, Harvard University Department of Economics.
- 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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