Positional effects in public good provision. Strategic interaction and inertia
Résumé
Consumption satisfaction depends on other factors apart from the inherent characteristic of
commodities. Among them, positional concerns are central in behavioral economics. Individuals
enjoy returns from the ranking occupied by the consumed item. In public good, agents obtain
satisfaction from their relative contribution. We analyze how positional preferences for voluntary
contribution to a public good favor players’ contributions and could lead to social welfare
improvements. A two-player public good game is analyzed, first a one-shot game and later a
simple dynamic game with inertia. Homogeneous and non-homogeneous individuals are
considered and particular attention is given to the transition path.
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