Working Paper: CEPR ID: DP8607
Authors: Kimberley Ann Scharf
Abstract: We describe a model of fundraising in social groups, where private information about quality of provision is transmitted by social proximity. Individuals engage in voluntary provision of a pure collective good that is consumed by both neighbors and non-neighbors. We show that, unlike in the case of private goods, better informed individuals face positive incentives to incur a cost to share information with their neighbors. These incentives are stronger, and provision of the pure public good greater, the smaller are individuals? social neighborhoods.
Keywords: private provision of public goods; social learning
JEL Codes: D6; D7; H1; L3
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| social proximity (Z13) | information transmission (L96) |
| information transmission (L96) | collective provision of public goods (H40) |
| better-informed individuals (D83) | share information with neighbors (D16) |
| smaller social neighborhoods (R23) | higher levels of private provision (H42) |
| larger social neighborhoods (R23) | lower fundraising intensity (L39) |
| lower fundraising intensity (L39) | lower information diffusion (D89) |
| social neighborhoods (R23) | incentives to fundraise (H27) |
| stock of information (D83) | fundraising intensity (L31) |