American Economic Journal:
Microeconomics
ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)
Public Goods in Endogenous Networks
American Economic Journal: Microeconomics
vol. 9,
no. 3, August 2017
(pp. 187–212)
Abstract
We study a local public good game in an endogenous network with heterogeneous players. The source of heterogeneity affects the gains from a connection and hence equilibrium networks. When players differ in the cost of producing the public good, active players form pyramidal complete multipartite graphs; yet, better types need not have more neighbors. When players differ in the valuation of the public good, nested split graphs emerge in which production need not be monotonic in type. In large societies, few players produce a lot; furthermore, networks dampen inequality under cost heterogeneity and increase it under heterogeneity in valuation.Citation
Kinateder, Markus, and Luca Paolo Merlino. 2017. "Public Goods in Endogenous Networks." American Economic Journal: Microeconomics, 9 (3): 187–212. DOI: 10.1257/mic.20140276Additional Materials
JEL Classification
- D63 Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- D85 Network Formation and Analysis: Theory
- H41 Public Goods
There are no comments for this article.
Login to Comment