Pareto meets Olson: A note on Pareto-optimality and group size in linear public goods games

Arbeitspapier

In this paper I examine the relationship between Pareto-optimality and group size in linear public goods games or experiments. In particular, I use the standard setting of homogeneous linear public goods experiments and apply a recently developed tool to identify all Pareto-optimal allocations in such settings. It turns out that under any conceivable circumstances, ceteris paribus, small groups have a higher Pareto-ratio (Pareto-optimal allocations over total allocations) than large groups. Hence, if Pareto-optimality of an allocation is a property that makes such allocations acceptable and maintainable, small groups will find is easier to provide Pareto-optimal amounts of a public good than large groups. This is a novel reasoning for Mancur Olson's claim, in particular, with respect to what he has termed inclusive goods and inclusive groups.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CAWM Discussion Paper ; No. 48

Classification and Topics

• Classification: Wirtschaft ; Public Goods ; Design of Experiments: General ; History of Economic Thought: Individuals
• Subject: Olson ; Pareto ; public goods ; Pareto-optimality ; linear public goods experiments ; inclusive groups

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Pickhardt, Michael
• Event: Veröffentlichung
• (who): Westfälische Wilhelms-Universität Münster, Centrum für Angewandte Wirtschaftsforschung (CAWM)
• (where): Münster
• (when): 2011

Further information

• Handle: http://hdl.handle.net/10419/51369
• Last update: 10.03.2025, 11:44 AM CET