pure public goods , repeated game , non-monotonic group-size effect
Abstract:
This paper analyzes the impact of a group-size change on contributing incentives
in repeated provision of pure public goods. We develop a model in which the group members interact repeatedly and might be temporarily constrained to contribute to the public goods production. We show that an increase in the
group size generates two opposite effects - the standard free-riding effect and
the novel large-scale effect, which enhances cooperative incentives. Our results
indicate that the former effect dominates in relatively large groups whilethe latter in relatively small groups. We provide therefore a rationale for nonmonotonic group-size effect which is consistent with the previous empirical
and experimental findings.
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