Asymmetric Contributions from Identical Agents in a Local Interaction Model

Luca Corazzini

No 24, ISLA Working Papers from ISLA, Centre for research on Latin American Studies and Transition Economies, Universita' Bocconi, Milano, Italy

Abstract: The main findings of the theory on the private provision of public goods under the assumptions of identical individuals and normality of both the public good and private consumption are that: 1) there exists a unique Nash equilibrium pattern of contributions in which everybody contributes the same amount; 2) this pattern is stable. We show that these findings no longer hold in a context characterized by local interaction. Individuals are distributed around a circle and enjoy the level of public good contributed in their neighborhood. Each individual belongs to a neighborhood defined as the first k individuals on her right, the first k individuals on her left, and herself. In this context, it is always possible to find preferences satisfying the assumption of normality such that the symmetric Nash equilibrium is unstable, and there exists at least one asymmetric Nash equilibrium which is locally stable.

Keywords: Local Interaction; Public Goods; Nash Equilibria. (search for similar items in EconPapers)
JEL-codes: C62 C72 H41 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2006-08, Revised 2007-03
New Economics Papers: this item is included in nep-mic, nep-pbe, nep-pub and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
ftp://ftp.unibocconi.it/pub/RePEc/slp/papers/islawp24.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 500 Failed to connect to FTP server ftp.unibocconi.it: No such host is known.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:slp:islawp:islawp24

Access Statistics for this paper

More papers in ISLA Working Papers from ISLA, Centre for research on Latin American Studies and Transition Economies, Universita' Bocconi, Milano, Italy via Sarfatti, 25 - 20136 Milano - Italy.
Bibliographic data for series maintained by Stefano Riela ().