A Network Approach to Public Goods
Accepted version
Peer-reviewed
Repository URI
Repository DOI
Change log
Authors
Golub, Benjamin
Abstract
Suppose agents can exert costly effort that creates nonrival, heterogeneous benefits for each other. At each possible outcome, a weighted, directed network describing marginal externalities is defined. We show that Pareto efficient outcomes are those at which the largest eigenvalue of the network is 1. An important set of efficient solutions---Lindahl outcomes---are characterized by contributions being proportional to agents' eigenvector centralities in the network. The outcomes we focus on are motivated by negotiations. We apply the results to identify who is essential for Pareto improvements, how to efficiently subdivide negotiations, and whom to optimally add to a team.
Description
Keywords
38 Economics, 35 Commerce, Management, Tourism and Services
Journal Title
Journal of Political Economy
Conference Name
Journal ISSN
0022-3808
1537-534X
1537-534X
Volume Title
127
Publisher
University of Chicago Press
Publisher DOI
Sponsorship
European Research Council (757229)