IDEAS home Printed from https://ideas.repec.org/p/ces/ceswps/_4492.html
   My bibliography  Save this paper

Private Provision of Public Goods and Information Diffusion in Social Groups

Author

Listed:
  • Kimberley Ann Scharf

Abstract

We describe a dynamic model of costly information sharing, where private information affecting collective-value actions is transmitted by social proximity. Individuals make voluntary contributions towards the provision of a pure public good, and information transmission about quality of provision is a necessary condition for collective provision to take place in a stationary equilibrium. We show that, unlike in the case of private goods, better informed individuals face positive incentives to incur a cost to share information with their neighbours; and that these incentives are stronger, and provision of the pure public good greater, the smaller are individuals’ social neighbourhoods.

Suggested Citation

  • Kimberley Ann Scharf, 2013. "Private Provision of Public Goods and Information Diffusion in Social Groups," CESifo Working Paper Series 4492, CESifo.
    • Handle: RePEc:ces:ceswps:_4492
    as

    Download full text from publisher

    File URL: https://www.cesifo.org/DocDL/cesifo1_wp4492.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Gale, Douglas & Kariv, Shachar, 2003. "Bayesian learning in social networks," Games and Economic Behavior, Elsevier, vol. 45(2), pages 329-346, November.
    2. Chatterjee, Kalyan & Dutta, Bhaskar, 2010. "Word of Mouth Advertising, Credibility and Learning in Networks," Economic Research Papers 270997, University of Warwick - Department of Economics.
    3. Glenn Ellison & Drew Fudenberg, 1995. "Word-of-Mouth Communication and Social Learning," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(1), pages 93-125.
    4. Scharf, Kimberley Ann, 2000. "Why are tax expenditures for giving embodied in fiscal constitutions?," Journal of Public Economics, Elsevier, vol. 75(3), pages 365-387, March.
    5. Aumann, Robert J., 1974. "Subjectivity and correlation in randomized strategies," Journal of Mathematical Economics, Elsevier, vol. 1(1), pages 67-96, March.
    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. Kalyan Chatterjee & Bhaskar Dutta, 2016. "Credibility And Strategic Learning In Networks," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 57(3), pages 759-786, August.
    8. Andreoni, James, 1990. "Impure Altruism and Donations to Public Goods: A Theory of Warm-Glow Giving?," Economic Journal, Royal Economic Society, vol. 100(401), pages 464-477, June.
    9. Crawford, Vincent P & Sobel, Joel, 1982. "Strategic Information Transmission," Econometrica, Econometric Society, vol. 50(6), pages 1431-1451, November.
    10. Bramoulle, Yann & Kranton, Rachel, 2007. "Public goods in networks," Journal of Economic Theory, Elsevier, vol. 135(1), pages 478-494, July.
    11. Abhijit V. Banerjee, 1992. "A Simple Model of Herd Behavior," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(3), pages 797-817.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Scharf, Kimberley & Smith, Sarah, 2014. "Relational Warm Glow and Giving in Social Groups," CEPR Discussion Papers 10051, C.E.P.R. Discussion Papers.
    2. Scharf, Kimberley & Smith, Sarah, 2016. "Relational altruism and giving in social groups," Journal of Public Economics, Elsevier, vol. 141(C), pages 1-10.
    3. Leonardo Becchetti & Vittorio Pelligra & Tommaso Reggiani, 2017. "Information, belief elicitation and threshold effects in the 5X1000 tax scheme: a framed field experiment," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 24(6), pages 1026-1049, December.
    4. Perroni, Carlo & Scharf, Kimberley & Talavera, Oleksandr & Vi, Linh, 2021. "Online Salience and Charitable Giving : Evidence from SMS Donations," The Warwick Economics Research Paper Series (TWERPS) 1325, University of Warwick, Department of Economics.
    5. repec:bri:cmpowp:13/327 is not listed on IDEAS
    6. Perroni, Carlo & Scharf, Kimberley & Talavera, Oleksandr & Vi, Linh, 2022. "Does online salience predict charitable giving? Evidence from SMS text donations," Journal of Economic Behavior & Organization, Elsevier, vol. 197(C), pages 134-149.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Daron Acemoglu & Asuman Ozdaglar, 2011. "Opinion Dynamics and Learning in Social Networks," Dynamic Games and Applications, Springer, vol. 1(1), pages 3-49, March.
    2. Tsakas, Nikolas, 2017. "Diffusion by imitation: The importance of targeting agents," Journal of Economic Behavior & Organization, Elsevier, vol. 139(C), pages 118-151.
    3. Syngjoo Choi & Edoardo Gallo & Shachar Kariv, 2015. "Networks in the laboratory," Cambridge Working Papers in Economics 1551, Faculty of Economics, University of Cambridge.
    4. Buechel, Berno & Hellmann, Tim & Klößner, Stefan, 2015. "Opinion dynamics and wisdom under conformity," Journal of Economic Dynamics and Control, Elsevier, vol. 52(C), pages 240-257.
    5. Lionel Richefort, 2018. "Warm-glow giving in networks with multiple public goods," International Journal of Game Theory, Springer;Game Theory Society, vol. 47(4), pages 1211-1238, November.
    6. Jadbabaie, Ali & Molavi, Pooya & Sandroni, Alvaro & Tahbaz-Salehi, Alireza, 2012. "Non-Bayesian social learning," Games and Economic Behavior, Elsevier, vol. 76(1), pages 210-225.
    7. Markus Mobius & Tuan Phan & Adam Szeidl, 2015. "Treasure Hunt: Social Learning in the Field," NBER Working Papers 21014, National Bureau of Economic Research, Inc.
    8. Daron Acemoglu & Munther A. Dahleh & Ilan Lobel & Asuman Ozdaglar, 2011. "Bayesian Learning in Social Networks," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 78(4), pages 1201-1236.
    9. Michel Grabisch & Agnieszka Rusinowska, 2016. "Determining influential models," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-01318081, HAL.
    10. Michel Grabisch & Agnieszka Rusinowska, 2010. "Iterating influence between players in a social network," Documents de travail du Centre d'Economie de la Sorbonne 10089, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    11. Grabisch, Michel & Rusinowska, Agnieszka, 2013. "A model of influence based on aggregation functions," Mathematical Social Sciences, Elsevier, vol. 66(3), pages 316-330.
    12. Allouch, Nizar, 2015. "On the private provision of public goods on networks," Journal of Economic Theory, Elsevier, vol. 157(C), pages 527-552.
    13. Matthew O. Jackson & Benjamin Golub, 2007. "Naïve Learning in Social Networks: Convergence, Influence and Wisdom of Crowds," Working Papers 2007.64, Fondazione Eni Enrico Mattei.
    14. Clive Fraser, 2012. "Milton Friedman, the Demand for Money and the ECB’s Monetary-Policy Strategy," Discussion Papers in Economics 12/06, Division of Economics, School of Business, University of Leicester.
    15. Sebastian Bervoets & Kohmei Makihara, 2023. "Public Goods in Networks: Comparative Statics Results," AMSE Working Papers 2317, Aix-Marseille School of Economics, France.
    16. Francis Bloch & Gabrielle Demange & Rachel Kranton, 2018. "Rumors And Social Networks," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 59(2), pages 421-448, May.
    17. Camargo, Braz, 2014. "Learning in society," Games and Economic Behavior, Elsevier, vol. 87(C), pages 381-396.
    18. Akylai Taalaibekova, 2018. "Opinion formation in social networks," Operations Research and Decisions, Wroclaw University of Science and Technology, Faculty of Management, vol. 28(2), pages 85-108.
    19. Boðaçhan Çelen & Shachar Kariv & Andrew Schotter, 2005. "Words Speak Louder than Actions and Improve Welfare: An Experimental Test of Advice and Social Learning," Levine's Bibliography 784828000000000250, UCLA Department of Economics.
    20. Ignatius J. Horstmann & Kimberley A. Scharf, 2008. "A Theory of Distributional Conflict, Voluntarism and Segregation," Economic Journal, Royal Economic Society, vol. 118(527), pages 427-453, March.

    More about this item

    Keywords

    private provision of public goods; information transmission; social learning;
    All these keywords.

    JEL classification:

    • H10 - Public Economics - - Structure and Scope of Government - - - General
    • L30 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - General
    • D60 - Microeconomics - - Welfare Economics - - - General
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ces:ceswps:_4492. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Klaus Wohlrabe (email available below). General contact details of provider: https://edirc.repec.org/data/cesifde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.