Pareto meets Olson: A note on Pareto-optimality and group size in linear public goods games

Michael Pickhardt

No 48, CAWM Discussion Papers from University of Münster, Münster Center for Economic Policy (MEP)

Abstract: In this paper I examine the relationship between Pareto-optimality and group size in linear public goods games or experiments. In particular, I use the standard setting of homogeneous linear public goods experiments and apply a recently developed tool to identify all Pareto-optimal allocations in such settings. It turns out that under any conceivable circumstances, ceteris paribus, small groups have a higher Pareto-ratio (Pareto-optimal allocations over total allocations) than large groups. Hence, if Pareto-optimality of an allocation is a property that makes such allocations acceptable and maintainable, small groups will find is easier to provide Pareto-optimal amounts of a public good than large groups. This is a novel reasoning for Mancur Olson's claim, in particular, with respect to what he has termed inclusive goods and inclusive groups.

Keywords: Olson; Pareto; public goods; Pareto-optimality; linear public goods experiments; inclusive groups (search for similar items in EconPapers)
JEL-codes: B31 C90 H41 (search for similar items in EconPapers)
Date: 2011
New Economics Papers: this item is included in nep-gth
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https://www.econstor.eu/bitstream/10419/51369/1/672472236.pdf (application/pdf)

Related works:
Journal Article: Pareto meets Olson – A Note on Pareto-optimality and Group Size in Linear Public Goods Games (2012)
Working Paper: Pareto meets Olson – A Note on Pareto-optimality and Group Size in Linear Public Goods Games
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:cawmdp:48

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