Error message

Deprecated function: Array and string offset access syntax with curly braces is deprecated in include_once() (line 20 of /mnt/web104/a0/07/510451407/htdocs/includes/file.phar.inc).

Public Goods in Endogenous Networks

Printer-friendly version
Article
Author/s: 
Markus Kinateder, Luca Paolo Merlino
American Economic Journal: Microeconomics
Issue number: 
VOL. 9, NO. 3, August 2017
Publisher: 
American Economic Association
Year: 
2017
Journal pages: 
187-212
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.
Developed by Paolo Gittoi