PRIVATE PROVISION OF PUBLIC GOODS AND INFORMATION DIFFUSION IN SOCIAL GROUPS

Kimberley Scharf

International Economic Review, 2014, vol. 55, issue 4, 1019-1042

Abstract: I describe a dynamic model of costly information sharing where private information affecting collective‐value actions is transmitted by social proximity. Individuals make voluntary contributions toward the provision of a pure public good, and information transmission about quality of provision is a necessary condition for collective provision to take place in a stationary equilibrium. I 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 and that these incentives are stronger and provision of the pure public good greater the smaller are individuals' social neighborhoods.

Date: 2014
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https://doi.org/10.1111/iere.12081

Related works:
Working Paper: Private Provision of Public Goods and Information Diffusion in Social Groups (2013)
Working Paper: Private Provision of Public Goods and Information Diffusion in Social Groups (2011)
Working Paper: Private Provision of Public Goods and Information Diffusion in Social Groups (2011)
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