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Private Provision of Public Goods and Information Diffusion in Social Groups

  • Scharf, Kimberley

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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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 8607.

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Date of creation: Oct 2011
Date of revision:
Handle: RePEc:cpr:ceprdp:8607
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  1. Aumann, Robert J., 1974. "Subjectivity and correlation in randomized strategies," Journal of Mathematical Economics, Elsevier, vol. 1(1), pages 67-96, March.
  2. Chatterjee, Kalyan & Dutta, Bhaskar, 2010. "Word of Mouth Advertising, Credibility and Learning in Networks," The Warwick Economics Research Paper Series (TWERPS) 941, University of Warwick, Department of Economics.
  3. repec:tpr:qjecon:v:110:y:1995:i:1:p:93-125 is not listed on IDEAS
  4. V. Crawford & J. Sobel, 2010. "Strategic Information Transmission," Levine's Working Paper Archive 544, David K. Levine.
  5. 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 464-77, June.
  6. Fudenberg, Drew & Ellison, Glenn, 1995. "Word-of-Mouth Communication and Social Learning," Scholarly Articles 3196300, Harvard University Department of Economics.
  7. repec:oup:qjecon:v:107:y:1992:i:3:p:797-817 is not listed on IDEAS
  8. 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.
  9. Gale, Douglas & Kariv, Shachar, 2003. "Bayesian learning in social networks," Games and Economic Behavior, Elsevier, vol. 45(2), pages 329-346, November.
  10. Chatterjee, Kalyan & Dutta, Bhaskar, 2011. "Credibility and Strategic Learning in Networks," The Warwick Economics Research Paper Series (TWERPS) 972, University of Warwick, Department of Economics.
  11. Bramoulle, Yann & Kranton, Rachel, 2007. "Public goods in networks," Journal of Economic Theory, Elsevier, vol. 135(1), pages 478-494, July.
  12. repec:oup:qjecon:v:110:y:1995:i:1:p:93-125 is not listed on IDEAS
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