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Title:We Are Not Alone: The Impact of Externalities on Public Good Provision PDF Logo
Authors:Rockenbach, Bettina
Engel, Christoph
Issue Date:2010
Series/Report no.:Beiträge zur Jahrestagung des Vereins für Socialpolitik 2010: Ökonomie der Familie - Session: Voluntary Cooperation E15-V3
Abstract:Providing public goods is hard, because providers are best off free-riding. Is it even harder if one group's public good is a public bad for another group or, conversely, gives the latter a windfall profit? We experimentally study public goods provision embedded in a social context and find that in the absence of explicit norms externalities have almost no effect. With an endogenously formed provision norm positive as well as negative externalities dampen provision as compared to no externalities. We explain the surprisingly low provision under positive externalities by the providers' increased risk of inequity and stress the importance of institutions sustaining conditional cooperation.
Subjects:Public Good
Conditional Cooperation
Inequity Aversion
Document Type:Conference Paper
Appears in Collections:Jahrestagung des Vereins für Socialpolitik 2010: Ökonomie der Familie

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