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Unequal Contributions from Symmetric Agents in a Local Interaction Model

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  • LUCA CORAZZINI
  • UGO GIANAZZA

Abstract

The main findings of the theory on the private provision of public goods under the assumptions of symmetric agents and normality are that (1) there exists a unique Nash equilibrium in which everybody contributes the same; and (2) this pattern is stable. We show that these findings no longer hold in a context characterized by local interaction. In this context, it is always possible to find preferences satisfying the assumption of normality such that the symmetric Nash equilibrium is unstable, and there exist asymmetric Nash equilibria which are locally stable.

Suggested Citation

  • Luca Corazzini & Ugo Gianazza, 2008. "Unequal Contributions from Symmetric Agents in a Local Interaction Model," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 10(3), pages 351-370, June.
    • Handle: RePEc:bla:jpbect:v:10:y:2008:i:3:p:351-370
    DOI: 10.1111/j.1467-9779.2008.00366.x
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    Cited by:

    1. Allouch, Nizar, 2015. "On the private provision of public goods on networks," Journal of Economic Theory, Elsevier, vol. 157(C), pages 527-552.
    2. Allouch, Nizar, 2015. "On the private provision of public goods on networks," Journal of Economic Theory, Elsevier, vol. 157(C), pages 527-552.
    3. Andrea Caravaggio & Mauro Sodini, 2022. "Local environmental quality and heterogeneity in an OLG agent-based model with spatial externalities," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 17(1), pages 287-317, January.
    4. Michael Brock & Jacqueline Doremus & Liqing Li, 2020. "Birds of a Feather Lockdown Together: Mutual bird-human benefits during a global pandemic," University of East Anglia School of Economics Working Paper Series 2019-07, School of Economics, University of East Anglia, Norwich, UK..

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