Non-monotonic group-size effect in repeated provision of public goods

Chengsi Wang, Galina Zudenkova

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1 Citation (Scopus)

Abstract

This paper analyzes the effect of a change in group size on incentives to contribute in repeated provision of pure public goods. We develop a model in which group members interact repeatedly, and might be temporarily unable to contribute to public goods production during some periods. We show that an increase in the group size generates two opposite effects – the standard free-riding effect that suppresses cooperation, and the novel large-scale effect that enhances cooperation. Our results indicate that the former effect dominates in relatively large groups while the latter dominates in relatively small groups. We, therefore, provide a rationale for a non-monotonic group-size effect that may explain previous empirical and experimental findings.

Original languageEnglish
Pages (from-to)116-128
Number of pages13
JournalEuropean Economic Review
Volume89
DOIs
Publication statusPublished - 1 Oct 2016

Keywords

  • Non-monotonic group-size effect
  • Pure public goods
  • Repeated game

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