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Positional effects in public good provision. Strategic interaction and inertia

Author

Listed:
  • Francisco Cabo

    (UVa - Universidad de Valladolid [Valladolid])

  • Alain Jean-Marie

    (NEO - Network Engineering and Operations - Centre Inria d'Université Côte d'Azur - Inria - Institut National de Recherche en Informatique et en Automatique)

  • Mabel Tidball

    (CEE-M - Centre d'Economie de l'Environnement - Montpellier - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - UM - Université de Montpellier)

Abstract

Consumption satisfaction depends on other factors apart from the inherent characteristic of commodities. Among them, positional concerns are central in behavioural economics. Individuals enjoy returns from the ranking occupied by the consumed item. In public good, agents obtain satisfaction from their relative contribution. We analyse how positional preferences for voluntary contribution to a public good favour players' contributions and could lead to social welfare improvements. A two-player public good game is analysed, first a one-shot game and later a simple dynamic game with inertia. Homogeneous and non-homogeneous individuals are considered and particular attention is given to the transition path.

Suggested Citation

  • Francisco Cabo & Alain Jean-Marie & Mabel Tidball, 2022. "Positional effects in public good provision. Strategic interaction and inertia," CEE-M Working Papers hal-03649283, CEE-M, Universtiy of Montpellier, CNRS, INRA, Montpellier SupAgro.
    • Handle: RePEc:hal:wpceem:hal-03649283
    Note: View the original document on HAL open archive server: https://hal.inrae.fr/hal-03649283v1
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    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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