Olson’s exploitation hypothesis in a public good economy: a reconsideration

Wolfgang Buchholz () and Todd Sandler

Public Choice, 2016, vol. 168, issue 1, No 6, 103-114

Abstract: Abstract Since the publication of Olson’s (1965) The Logic of Collective Action, the exploitation hypothesis, in which the rich shoulder the provision burden of public goods for the poor, has held sway despite empirical exceptions. To address such exceptions, we establish two alternative exploitation hypotheses based on contributors’ asymmetric preferences or on their productivity differences regarding the public good. The classic hypothesis and its two variants are proven in a novel fashion. For asymmetric preferences, we also establish the exploitation hypothesis for the joint products model with private and public co-benefits. Our theoretical insights are then illustrated by some empirical examples from the field of international public goods, such as military defense and cross-border pollution.

Keywords: Public goods; Exploitation hypothesis; Collective action; Asymmetric preferences (search for similar items in EconPapers)
JEL-codes: F53 H41 H87 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (4)

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DOI: 10.1007/s11127-016-0351-6

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