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Constrained public goods in networks

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  • Nizar Allouch
  • Maia King

Abstract

This paper analyses the private provision of public goods where agents interact within a fixed network structure and may benefit only from their direct neighbours’ provisions. We survey the literature and then generalise the public goods in networks model of Bramoulle and Kranton (2007) to allow for constrained provision. In so doing, we show that, using the concept of k-insulated set, any network supports a Nash equilibrium with no intermediate contributors.

Suggested Citation

  • Nizar Allouch & Maia King, 2018. "Constrained public goods in networks," Studies in Economics 1806, School of Economics, University of Kent.
    • Handle: RePEc:ukc:ukcedp:1806
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    References listed on IDEAS

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    1. Becker, Gary S, 1974. "A Theory of Social Interactions," Journal of Political Economy, University of Chicago Press, vol. 82(6), pages 1063-1093, Nov.-Dec..
    2. Allouch, Nizar, 2017. "The cost of segregation in (social) networks," Games and Economic Behavior, Elsevier, vol. 106(C), pages 329-342.
    3. Allouch, Nizar, 2015. "On the private provision of public goods on networks," Journal of Economic Theory, Elsevier, vol. 157(C), pages 527-552.
    4. Coralio Ballester & Antoni Calvó-Armengol & Yves Zenou, 2006. "Who's Who in Networks. Wanted: The Key Player," Econometrica, Econometric Society, vol. 74(5), pages 1403-1417, September.
    5. Matthew Elliott & Benjamin Golub, 2019. "A Network Approach to Public Goods," Journal of Political Economy, University of Chicago Press, vol. 127(2), pages 730-776.
    6. Melo, Emerson, 2018. "A Variational Approach to Network Games," ETA: Economic Theory and Applications 268732, Fondazione Eni Enrico Mattei (FEEM).
    7. Daron Acemoglu & Camilo García-Jimeno & James A. Robinson, 2015. "State Capacity and Economic Development: A Network Approach," American Economic Review, American Economic Association, vol. 105(8), pages 2364-2409, August.
    8. Yann Bramoull? & Rachel Kranton & Martin D'Amours, 2014. "Strategic Interaction and Networks," American Economic Review, American Economic Association, vol. 104(3), pages 898-930, March.
    9. Bergstrom, Theodore & Blume, Lawrence & Varian, Hal, 1986. "On the private provision of public goods," Journal of Public Economics, Elsevier, vol. 29(1), pages 25-49, February.
    10. Sun, Guang-Zhen, 2017. "The Samuelson condition and the Lindahl scheme in networks," Journal of Public Economics, Elsevier, vol. 156(C), pages 73-80.
    11. Emerson Melo, 2018. "A Variational Approach to Network Games," Working Papers 2018.05, Fondazione Eni Enrico Mattei.
    12. Buchholz, Wolfgang & Cornes, Richard & Rübbelke, Dirk, 2011. "Interior matching equilibria in a public good economy: An aggregative game approach," Journal of Public Economics, Elsevier, vol. 95(7), pages 639-645.
    13. Andreoni, James, 1989. "Giving with Impure Altruism: Applications to Charity and Ricardian Equivalence," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1447-1458, December.
    14. Markus Kinateder & Luca Paolo Merlino, 2017. "Public Goods in Endogenous Networks," American Economic Journal: Microeconomics, American Economic Association, vol. 9(3), pages 187-212, August.
    15. Acemoglu, Daron & Malekian, Azarakhsh & Ozdaglar, Asu, 2016. "Network security and contagion," Journal of Economic Theory, Elsevier, vol. 166(C), pages 536-585.
    16. Bloch, Francis & Zenginobuz, E. Unal, 2006. "Tiebout equilibria in local public good economies with spillovers," Journal of Public Economics, Elsevier, vol. 90(8-9), pages 1745-1763, September.
    17. Bernheim, B Douglas, 1986. "On the Voluntary and Involuntary Provision of Public Goods," American Economic Review, American Economic Association, vol. 76(4), pages 789-793, September.
    18. Dunia López-Pintado, 2017. "Influence networks and public goods," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 8(1), pages 97-112, March.
    19. 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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    Cited by:

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    2. Carvajal, Andrés & Song, Xinxi, 2022. "Implementing Lindahl allocations in a warm-glow economy," Economics Letters, Elsevier, vol. 217(C).
    3. Chukwudi Henry Dike, 2020. "Strategic Interactions in Financial Networks," 2020 Papers pdi579, Job Market Papers.
    4. Allouch, Nizar & King, Maia, 2021. "Welfare targeting in networks," Journal of Mathematical Economics, Elsevier, vol. 96(C).
    5. Artem Sedakov, 2020. "Characteristic Function and Time Consistency for Two-Stage Games with Network Externalities," Mathematics, MDPI, vol. 8(1), pages 1-9, January.
    6. Alan Griffith, 2022. "A continuous model of strong and weak ties," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 24(6), pages 1519-1563, December.
    7. Fu, Wentao & Sun, Yang, 2021. "Rumor investigation in networks," Economic Modelling, Elsevier, vol. 98(C), pages 168-178.
    8. Fu, Wentao & Hua, Di & Qian, Xuewen & Sun, Yang, 2022. "Constrained public goods in weighted networks with heterogeneous agents," Economics Letters, Elsevier, vol. 213(C).
    9. Faias, Marta & Moreno-García, Emma, 2022. "On the use of public goods," Mathematical Social Sciences, Elsevier, vol. 115(C), pages 58-63.
    10. Dike Chukwudi Henry, 2021. "Network Games, Peer Effect and Neutral Transfers," Studies in Economics 2107, School of Economics, University of Kent.

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    More about this item

    Keywords

    public goods; Nash equilibrium; k-insulated set; networks;
    All these keywords.

    JEL classification:

    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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