The Role of Cultural Capital on the Voluntary Contributions to Cultural Goods: A Differential Game Approach

Massimo Finocchiaro Castro, Isidoro Mazza and Domenica Romeo
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Isidoro Mazza: Department of Economics and Business, University of Catania, 95129 Catania, Italy
Domenica Romeo: Department of Law Economics and Social Sciences, Mediterranean University of Reggio Calabria, via dei Bianchi 2, 89100 Reggio Calabria, Italy

Games, 2021, vol. 12, issue 1, 1-11

Abstract: This study aims to offer a formal analysis which relates provision of cultural goods to the society’s level of cultural capital. Such a level is assumed to already exist in society and is increasable thanks to individual support for the offer of cultural goods. The achievement of the highest levels of cultural capital increases satisfaction coming from cultural goods consumption, and then voluntary contributions. Social approval, deriving from donations, is positively related to society’s existing cultural capital and triggers a positive externality for donators, thus increasing contributions and generating a positive externality for the whole society. The dynamic analysis provided in this study requires the adoption of a differential game where individuals interact, making their choices on their voluntary contribution level. We find that, under certain conditions, the solution obtained for the Nash equilibrium with closed-loop strategies provides optimal level of cultural capital that exceed the Pareto efficient solution obtained through open-loop strategies.

Keywords: public goods; cultural capital; voluntary offer; social approval; differential games (search for similar items in EconPapers)
JEL-codes: C C7 C70 C71 C72 C73 (search for similar items in EconPapers)
Date: 2021
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