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Public goods in networks with constraints on sharing

JOURNAL OF ECONOMIC THEORY2024-07

Gerke Stefanie | Gutin, Gregory | Hwang, Sung-Ha | Neary Philip R.

This paper considers incentives to provide goods that are partially shareable along social links. We introduce a model in which each individual in a social network not only decides how much of a shareable good to provide, but also decides which subset of neighbours to nominate as co- beneficiaries. An outcome of the model specifies an endogenously generated subnetwork and a public goods game occurring over the realised subnetwork. We prove the existence of specialised pure strategy Nash equilibria: those in which some individuals contribute while the remaining individuals free ride. We then consider how the set of efficient specialised equilibria vary as the constraints on sharing are relaxed and we show that, paradoxically, an increase in shareability may decrease efficiency.

Publisher
ACADEMIC PRESS INC ELSEVIER SCIENCE
Issue Date
2024-07
Article Type
Article
Citation
JOURNAL OF ECONOMIC THEORY, Vol.219
ISSN
0022-0531
DOI
10.1016/j.jet.2024.105844
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