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Reciprocity Networks and the Participation Problem

  • Martin Dufwenberg
  • Amrish Patel

Reciprocity can be a powerful motivation for human behaviour. Scholars argue that it is relevant in the context of private provision of public goods. We examine whether reciprocity can resolve the associated coordination problem. The interaction of reciprocity with cost-sharing is critical. Neither cost-sharing nor reciprocity in isolation can solve the problem, but together they have that potential. We introduce new network notions of reciprocity relations to better understand this. Our analysis uncovers an intricate web of nuances that demonstrate the attainable yet elusive nature of a unique outcome.Keywords: Discrete public good, participation, reciprocity networks, coordination, cost-sharing JEL codes: C72, D03, H41.

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Paper provided by IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University in its series Working Papers with number 521.

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Date of creation: 2014
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Handle: RePEc:igi:igierp:521
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  1. Rothenhäusler, Dominik & Schweizer, Nikolaus & Szech, Nora, 2013. "Institutions, shared guilt, and moral transgression," Discussion Papers, Research Unit: Economics of Change SP II 2013-305, Social Science Research Center Berlin (WZB).
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  11. Makris, Miltiadis, 2009. "Private provision of discrete public goods," Games and Economic Behavior, Elsevier, vol. 67(1), pages 292-299, September.
  12. Renaud Bourlès & Yann Bramoullé, 2013. "Altruism in Networks," Working Papers halshs-00881451, HAL.
  13. Dufwenberg, Martin & Kirchsteiger, Georg, 2000. "Reciprocity and wage undercutting," European Economic Review, Elsevier, vol. 44(4-6), pages 1069-1078, May.
  14. Fischbacher, Urs & Gachter, Simon & Fehr, Ernst, 2001. "Are people conditionally cooperative? Evidence from a public goods experiment," Economics Letters, Elsevier, vol. 71(3), pages 397-404, June.
  15. Rothenhäusler, Dominik & Schweizer, Nikolaus & Szech, Nora, 2013. "Institutions, shared guilt, and moral transgression," Working Paper Series in Economics 47, Karlsruhe Institute of Technology (KIT), Department of Economics and Business Engineering.
  16. Sugden, Robert, 1984. "Reciprocity: The Supply of Public Goods through Voluntary Contributions," Economic Journal, Royal Economic Society, vol. 94(376), pages 772-87, December.
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