Public goods in networks with constraints on sharing

Stefanie Gerke, Gregory Gutin, Sung-Ha Hwang and Philip R. Neary

Journal of Economic Theory, 2024, vol. 219, issue C

Abstract: This paper considers incentives to provide goods that are partially shareable along social links. We introduce a model in which each individual in a social network not only decides how much of a shareable good to provide, but also decides which subset of neighbours to nominate as co-beneficiaries. An outcome of the model specifies an endogenously generated subnetwork and a public goods game occurring over the realised subnetwork. We prove the existence of specialised pure strategy Nash equilibria: those in which some individuals contribute while the remaining individuals free ride. We then consider how the set of efficient specialised equilibria vary as the constraints on sharing are relaxed and we show that, paradoxically, an increase in shareability may decrease efficiency.

Keywords: Networks; Public good provision; Constrained sharing; Endogenous network formation (search for similar items in EconPapers)
JEL-codes: D00 D85 H41 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:219:y:2024:i:c:s0022053124000504

DOI: 10.1016/j.jet.2024.105844

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