Pareto meets Olson – A Note on Pareto-optimality and Group Size in Linear Public Goods Games
AbstractIn this paper I examine the relationship between Pareto-optimality and group size in linear public goods games or experiments. In particular, I use the standard setting of homogeneous linear public goods experiments and apply a recently developed tool to identify all Pareto-optimal allocations in such settings. It turns out that under any conceivable circumstances, ceteris paribus, small groups have a higher Pareto-ratio (Pareto-optimal allocations over total allocations) than large groups. Hence, if Pareto-optimality of an allocation is a property that makes such allocations acceptable and maintainable, small groups will find is easier to provide Pareto-optimal amounts of a public good than large groups. This is a novel reasoning for Mancur Olson’s claim, in particular, with respect to what he has termed inclusive goods and inclusive groups.
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Bibliographic InfoPaper provided by Institute of Spatial and Housing Economics, Munster Universitary in its series Working Papers with number 201174.
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Olson; Pareto; public goods; Pareto-optimality; linear public goods experiments; inclusive groups;
Other versions of this item:
- Pickhardt, Michael, 2011. "Pareto meets Olson: A note on Pareto-optimality and group size in linear public goods games," CAWM Discussion Papers 48, Center of Applied Economic Research Münster (CAWM), University of Münster.
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
- C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
- B31 - Schools of Economic Thought and Methodology - - History of Economic Thought: Individuals - - - Individuals
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- Sascha Hokamp & Michael Pickhardt, .
"Pareto-optimality in Linear Public Goods Games,"
201171, Institute of Spatial and Housing Economics, Munster Universitary.
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- Jennifer Zelmer, 2003. "Linear Public Goods Experiments: A Meta-Analysis," Experimental Economics, Springer, vol. 6(3), pages 299-310, November.
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