On the Private Provision of Public Goods on Networks
AbstractThis paper analyzes the private provision of public goods where consumers interact within a fixed network structure and may benefit only from their direct neighbors' provisions. We present a proof for existence and uniqueness of a Nash equilibrium with general best-reply functions. Our uniqueness result simultaneously extends similar results in Bergstrom, Blume, and Varian (1986) on the private provision of public goods to networks and Bramoull�, Kranton, and D'Amours (2011) on games of strategic substitutes to nonlinear best-reply functions. In addition, we investigate the neutrality result of Warr (1983) and Bergstrom, Blume, and Varian (1986) whereby consumers are able to offset income redistributions and tax-financed government contributions. To this effect, we establish that the neutrality result has a limited scope of application beyond regular networks.
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Bibliographic InfoPaper provided by Queen Mary, University of London, School of Economics and Finance in its series Working Papers with number 689.
Date of creation: Feb 2012
Date of revision:
Public goods; Uniqueness of Nash equilibrium; Network games; Neutrality; Bonacich centrality; Main eigenvalue;
Other versions of this item:
- Nizar Allouch, 2012. "On the Private Provision of Public Goods on Networks," Working Papers 2012.40, Fondazione Eni Enrico Mattei.
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-03-08 (All new papers)
- NEP-GTH-2012-03-08 (Game Theory)
- NEP-MIC-2012-03-08 (Microeconomics)
- NEP-NET-2012-03-08 (Network Economics)
- NEP-PUB-2012-03-08 (Public Finance)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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- Andrea Galeotti & Sanjeev Goyal & Matthew O. Jackson & Fernando Vega-Redondo & Leeat Yariv, 2008.
Economics Working Papers
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- Nizar Allouch, 2013.
"The Cost of Segregation in Social Networks,"
2013.52, Fondazione Eni Enrico Mattei.
- repec:van:wpaper:1201 is not listed on IDEAS
- Marta Faias & Emma Moreno-garcÃa & Myrna Wooders, 2012.
"A strategic market game approach for the private provision of public goods,"
Vanderbilt University Department of Economics Working Papers
vuecon-12-00001, Vanderbilt University Department of Economics.
- Faias, Marta & Moreno, Emma & Wooders, Myrna, 2009. "A Strategic market game approach for the private provision of public goods," MPRA Paper 37777, University Library of Munich, Germany, revised 08 Mar 2012.
- repec:van:wpaper:vuecon-sub-12-00008 is not listed on IDEAS
- Clive Fraser, 2012. "Milton Friedman, the Demand for Money and the ECB’s Monetary-Policy Strategy," Discussion Papers in Economics 12/06, Department of Economics, University of Leicester.
- Fraser, Clive D., 2012. "Nash equilibrium existence and uniqueness in a club model," Economics Letters, Elsevier, vol. 117(2), pages 496-499.
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