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Revisiting the ‘group-size paradox' in the private provision of a pure public good

Author

Listed:
  • Tilak Sanyal

    (Department of Economics, Shibpur Dinobundhoo College, Howrah, India)

Abstract

In the presence of multiple varieties of a private good and a single pure public good, which is provided by the voluntary contribution of the individuals, Bag and Mondal (2014) shows that if the private and public goods are gross complement, the total amount of public good increases as the group size increases. But, if they are gross substitute, the relation between the two exhibits an inverted U pattern. In this paper, we assume a single variety of a private good and a pure public good. Our framework differs from that of Bag and Mondal (2014) in two aspects - all the individuals have general quasi- concave utility function instead of CES utility function, and the private good industry is competitive instead of monopolistic competitive. We show that if the two goods are gross substitute, the amount of public good increases with the group size under a unique sufficient condition which requires the labor demand in private good industry to be almost inelastic. But, if the two goods are gross complement, the relation is ambiguous. We also consider some possible extensions of the basic framework and intuitively discuss the relation between group size and level of provision of the public good.

Suggested Citation

  • Tilak Sanyal, 2025. "Revisiting the ‘group-size paradox' in the private provision of a pure public good," Economics Bulletin, AccessEcon, vol. 45(1), pages 653-667.
    • Handle: RePEc:ebl:ecbull:eb-24-00108
    as

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    References listed on IDEAS

    as
    1. Bag, Parimal Kanti & Mondal, Debasis, 2014. "Group size paradox and public goods," Economics Letters, Elsevier, vol. 125(2), pages 215-218.
    2. Paul Pecorino, 2009. "Monopolistic Competition, Growth and Public Good Provision," Economic Journal, Royal Economic Society, vol. 119(534), pages 298-307, January.
    3. Martin McGuire, 1974. "Group size, group homo-geneity, and the aggregate provision of a pure public good under cournot behavior," Public Choice, Springer, vol. 18(1), pages 107-126, June.
    4. Paul Pecorino & Akram Temimi, 2008. "The Group Size Paradox Revisited," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 10(5), pages 785-799, October.
    5. Chamberlin, John, 1974. "Provision of Collective Goods As a Function of Group Size," American Political Science Review, Cambridge University Press, vol. 68(2), pages 707-716, June.
    6. 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.
    7. Debasis Mondal, 2015. "Private provision of public good and immiserizing growth," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 45(1), pages 29-49, June.
    8. Joan Esteban & Debraj Ray, 2008. "Collective Action and the Group Size Paradox," Springer Books, in: Roger D. Congleton & Arye L. Hillman & Kai A. Konrad (ed.), 40 Years of Research on Rent Seeking 1, pages 379-388, Springer.
    9. Andreoni, James, 1988. "Privately provided public goods in a large economy: The limits of altruism," Journal of Public Economics, Elsevier, vol. 35(1), pages 57-73, February.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Public good; group size; general equilibrium; partial equilibrium;
    All these keywords.

    JEL classification:

    • D5 - Microeconomics - - General Equilibrium and Disequilibrium
    • H4 - Public Economics - - Publicly Provided Goods

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