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 neighbors and non-neighbors. 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 neighbors. These incentives are stronger, and provision of the pure public good greater, the smaller are individuals’ social neighborhoods.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 8607.
Date of creation: Oct 2011
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Other versions of this item:
- Scharf, Kim, 2011. "Private Provision of Public Goods and Information Diffusion in Social Groups," CAGE Online Working Paper Series 47, Competitive Advantage in the Global Economy (CAGE).
- 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
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-10-22 (All new papers)
- NEP-CIS-2011-10-22 (Confederation of Independent States)
- NEP-CTA-2011-10-22 (Contract Theory & Applications)
- NEP-PBE-2011-10-22 (Public Economics)
- NEP-PUB-2011-10-22 (Public Finance)
- NEP-SOC-2011-10-22 (Social Norms & Social Capital)
- NEP-URE-2011-10-22 (Urban & Real Estate Economics)
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3196300, Harvard University Department of Economics.
- Chatterjee, Kalyan & Dutta, Bhaskar, 2010. "Word of Mouth Advertising, Credibility and Learning in Networks," The Warwick Economics Research Paper Series (TWERPS) 941, University of Warwick, 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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