Discussion Paper Details

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Title: Private Provision of Public Goods and Information Diffusion in Social Groups

Author(s): Kimberley Scharf

Publication Date: October 2011

Keyword(s): private provision of public goods and social learning

Programme Area(s): Public Economics

Abstract: We describe a model of fundraising in social groups, where private information about quality of provision is transmitted by social proximity. Individuals engage in voluntary provision of a pure collective good that is consumed by both neighbors and non-neighbors. We show that, unlike in the case of private goods, better informed individuals face positive incentives to incur a cost to share information with their neighbors. These incentives are stronger, and provision of the pure public good greater, the smaller are individuals? social neighborhoods.

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Bibliographic Reference

Scharf, K. 2011. 'Private Provision of Public Goods and Information Diffusion in Social Groups'. London, Centre for Economic Policy Research.