Pareto-optimality in linear public goods games
AbstractWe derive a generalized method for calculating the total number of Paretooptimal allocations (NOPA) in typical linear public goods games. Among other things, the method allows researchers to develop new experimental designs for testing the relevance of Pareto-optimality in experimental settings, for investigating alternative causes of the decline of voluntary contributions, or for analyzing the contribution behavior of the rich and poor in heterogeneous income settings. Further findings include that the NOPA is related to the marginal per capita return (MPCR) of a contribution to the public good and that the maximum number of free-riders tolerated by the Paretooptimality concept is independent from the group size and income distribution. Finally, we apply our findings to a number of published linear public goods games, suggest an agenda for future research and provide a MATLAB code. --
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Bibliographic InfoPaper provided by Center of Applied Economic Research Münster (CAWM), University of Münster in its series CAWM Discussion Papers with number 45.
Date of creation: 2011
Date of revision:
linear public goods games; Pareto-optimality; public goods experiments; behavioral economics; free-rider; heterogeneous incomes; heterogeneous MPCRs;
Other versions of this item:
- C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
- C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-11-28 (All new papers)
- NEP-EVO-2011-11-28 (Evolutionary Economics)
- NEP-EXP-2011-11-28 (Experimental Economics)
- NEP-GTH-2011-11-28 (Game Theory)
- NEP-PUB-2011-11-28 (Public Finance)
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