The Exploitation Hypothesis in a Public Good Economy: Some Extensions

Wolfgang Buchholz () and Todd Sandler

No 5717, CESifo Working Paper Series from CESifo

Abstract: Since Olson’s (1965) The Logic of Collective Action, the exploitation hypothesis, in which the rich shoulders 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 asymmetric preferences or on productivity differences regarding the public good. The classic hypothesis and its two variants are proven in a novel fashion. Our theoretical insights are then illustrated by some empirical examples from the field of international public goods, such as military defence and cross-border pollution.

Keywords: public goods; exploitation hypothesis (search for similar items in EconPapers)
JEL-codes: F53 H41 H87 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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