Positional and conformist effects in public good provision. Strategic interaction and inertia
Résumé
Consumption satisfaction depends on other factors apart from the inherent characteristic of
commodities. Leibenstein (1950) studies how the consumer's demand reacts to other factors
different from the inherent characteristic of a specific commodity. In particular, he highlights the
desire of some consumers to be "in style", and the attempt by other for exclusiveness. The desire
of some people to conform with the others, to be fashionable or stylish provokes a "bandwagon
effect": the demand for a commodity increases due to the fact that others are consuming this same
commodity. Conversely, the desire of some other people to be exclusive, or different from the
"common hence" provokes the "snob" effect: the demand for a commodity decreases due to the
fact that others are consuming it. This paper analyzes positional concerns and conformism in a
model of private contributions to public good. A positional consumer gets joy when his/her relative
contribution to the public good is higher than the average contribution by others. A conformist
consumers feels better if his behavior fits the average behavior in society, i.e., near the average
contribution by others. The well-being of a conformist consumer decreases both when his
contribution is above or below the average contribution by others. We analyze how positional
preferences and conformism for voluntary contributions to a public good favor players'
contributions and under which conditions can lead to social welfare improvements. A two-player
public good game between a positional and a conformist is analyzed, first in a one-shot game and
later in a simple dynamic game with inertia, placing particular attention to the transition path.
Homogeneous and non-homogeneous individuals are considered regarding the players' valuation
of the public good.
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