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CAWM Discussion Papers, Universität Münster >
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http://hdl.handle.net/10419/51369
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| Title: | | Pareto meets Olson: A note on Pareto-optimality and group size in linear public goods games  |
| Authors: | | Pickhardt, Michael |
| Issue Date: | | 2011 |
| Series/Report no.: | | CAWM discussion paper / Centrum für Angewandte Wirtschaftsforschung Münster 48 |
| Abstract: | | In this paper I examine the relationship between Pareto-optimality and group size in linear public goods games or experiments. In particular, I use the standard setting of homogeneous linear public goods experiments and apply a recently developed tool to identify all Pareto-optimal allocations in such settings. It turns out that under any conceivable circumstances, ceteris paribus, small groups have a higher Pareto-ratio (Pareto-optimal allocations over total allocations) than large groups. Hence, if Pareto-optimality of an allocation is a property that makes such allocations acceptable and maintainable, small groups will find is easier to provide Pareto-optimal amounts of a public good than large groups. This is a novel reasoning for Mancur Olson's claim, in particular, with respect to what he has termed inclusive goods and inclusive groups. |
| Subjects: | | Olson Pareto public goods Pareto-optimality linear public goods experiments inclusive groups |
| JEL: | | H41 C90 B31 |
| Document Type: | | Working Paper |
| Appears in Collections: | | CAWM Discussion Papers, Universität Münster
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