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 Center of Applied Economic Research Münster (CAWM), University of Münster in its series CAWM Discussion Papers with number 48.
Date of creation: 2011
Date of revision:
Olson; Pareto; public goods; Pareto-optimality; linear public goods experiments; inclusive groups;
Other versions of this item:
- Michael Pickhardt, . "Pareto meets Olson – A Note on Pareto-optimality and Group Size in Linear Public Goods Games," Working Papers 201174, Institute of Spatial and Housing Economics, Munster Universitary.
- 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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- Hokamp, Sascha & Pickhardt, Michael, 2011.
"Pareto-optimality in linear public goods games,"
CAWM Discussion Papers
45, Center of Applied Economic Research Münster (CAWM), University of Münster.
- Michael Pickhardt, 2005. "Teaching Public Goods Theory With a Classroom Game," The Journal of Economic Education, Taylor & Francis Journals, vol. 36(2), pages 145-159, April.
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- Ananish Chaudhuri, 2011. "Sustaining cooperation in laboratory public goods experiments: a selective survey of the literature," Experimental Economics, Springer, vol. 14(1), pages 47-83, March.
- Brandts, Jordi & Schram, Arthur, 2001. "Cooperation and noise in public goods experiments: applying the contribution function approach," Journal of Public Economics, Elsevier, vol. 79(2), pages 399-427, February.
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