Discussion paper

DP8607 Private Provision of Public Goods and Information Diffusion in Social Groups

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.

£6.00
Citation

Scharf, K (2011), ‘DP8607 Private Provision of Public Goods and Information Diffusion in Social Groups‘, CEPR Discussion Paper No. 8607. CEPR Press, Paris & London. https://cepr.org/publications/dp8607