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Localized prosocial preferences, public goods, and common-pool resources

Author

Listed:
  • Andrew R. Tilman

    (Department of Ecology and Evolutionary Biology, Princeton University, Princeton, NJ 08544)

  • Avinash K. Dixit

    (Department of Economics, Princeton University, Princeton, NJ 08544)

  • Simon A. Levin

    (Department of Ecology and Evolutionary Biology, Princeton University, Princeton, NJ 08544)

Abstract

The presence of prosocial preferences is thought to reduce significantly the difficulty of solving societal collective action problems such as providing public goods (or reducing public bads). However, prosociality is often limited to members of an in-group. We present a general theoretical model where society is split into subgroups and people care more about the welfare of others in their own subgroup than they do about those in out-groups. Individual contributions to the public good spill over and benefit members in each group to different degrees. We then consider special cases of our general model under which we can examine the consequences of localized prosociality for the economic outcomes of society as a whole. We ask to what extent prosociality closes the welfare gap between the Nash equilibrium without prosociality and the social optimum. The answer depends on whether private and public inputs are good or poor substitutes in producing final output. Critically, the degree to which this welfare gap closes is a concave function of the level of prosociality in the case of poor substitutes, so even low levels of prosociality can lead to social welfare near the social optimum.

Suggested Citation

  • Andrew R. Tilman & Avinash K. Dixit & Simon A. Levin, 2019. "Localized prosocial preferences, public goods, and common-pool resources," Proceedings of the National Academy of Sciences, Proceedings of the National Academy of Sciences, vol. 116(12), pages 5305-5310, March.
    • Handle: RePEc:nas:journl:v:116:y:2019:p:5305-5310
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    Cited by:

    1. Timilsina, Raja R. & Kotani, Koji & Nakagawa, Yoshinori & Saijo, Tatsuyoshi, 2022. "Intragenerational deliberation and intergenerational sustainability dilemma," European Journal of Political Economy, Elsevier, vol. 73(C).
    2. Masaki Iwasaki, 2023. "Social preferences and well-being: theory and evidence," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-13, December.
    3. Tomomi Yamane & Shinji Kaneko, 2021. "What Motivates Stakeholders to Demand Corporate Social Responsibility: A Survey Experiment," Sustainability, MDPI, vol. 13(15), pages 1-15, July.

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