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Private Provision of Public Goods and Information Diffusion in Social Groups

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  • Scharf, Kimberley

Abstract

We describe a model of fundraising in social groups, where private information about quality of provision is transmitted by social proximity. Individuals engage in voluntary provision of a pure collective good that is consumed by both neighbors and non-neighbors. 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 neighbors. These incentives are stronger, and provision of the pure public good greater, the smaller are individuals’ social neighborhoods.

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  • Scharf, Kimberley, 2011. "Private Provision of Public Goods and Information Diffusion in Social Groups," CEPR Discussion Papers 8607, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:8607
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    1. repec:bri:cmpowp:13/327 is not listed on IDEAS
    2. 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.
    3. Scharf, Kimberley & Smith, Sarah, 2016. "Relational altruism and giving in social groups," Journal of Public Economics, Elsevier, vol. 141(C), pages 1-10.
    4. Scharf, Kimberley & Smith, Sarah, 2014. "Relational Warm Glow and Giving in Social Groups," CEPR Discussion Papers 10051, C.E.P.R. Discussion Papers.
    5. Scharf, Kimberley & Smith, Sarah, 2014. "Relational Warm Glow and Giving in Social Groups," CEPR Discussion Papers 10051, C.E.P.R. Discussion Papers.

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    More about this item

    Keywords

    private provision of public goods; social learning;

    JEL classification:

    • D6 - Microeconomics - - Welfare Economics
    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • H1 - Public Economics - - Structure and Scope of Government
    • L3 - Industrial Organization - - Nonprofit Organizations and Public Enterprise

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