An Impure Public Good Model with Lotteries in Large Groups
16 Pages Posted: 18 Apr 2011
Date Written: April 2011
Abstract
We analyze the effect of a large group on an impure public goods model with lotteries. We show that as populations get large, and with selfish preferences, the level of contributions converges to the one given by voluntary contributions. With altruistic preferences (of the warm glow type), the contributions converge to a level strictly higher than those given by voluntary contributions, even though in general they do not yield first-best levels.
Keywords: efficiency, lotteries, public good, warm glow
JEL Classification: D64, H21, H41
Suggested Citation: Suggested Citation
Cabrales, Antonio and Lugo, Haydée, An Impure Public Good Model with Lotteries in Large Groups (April 2011). CEPR Discussion Paper No. DP8319, Available at SSRN: https://ssrn.com/abstract=1810284
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