Reciprocity Networks and the Participation Problem

22 Pages Posted: 14 Aug 2014

See all articles by Martin Dufwenberg

Martin Dufwenberg

University of Arizona - Department of Economics

Amrish Patel

University of Gothenburg - Department of Economics and Statistics

Date Written: July 29, 2014

Abstract

Reciprocity can be a powerful motivation for human behaviour. Scholars argue that it is relevant in the context of private provision of public goods. We examine whether reciprocity can resolve the associated coordination problem. The interaction of reciprocity with cost-sharing is critical. Neither cost-sharing nor reciprocity in isolation can solve the problem, but together they have that potential. We introduce new network notions of reciprocity relations to better understand this. Our analysis uncovers an intricate web of nuances that demonstrate the attainable yet elusive nature of a unique outcome.

Keywords: discrete public good, participation, reciprocity networks, coordination, cost-sharing

JEL Classification: C720, D030, H410

Suggested Citation

Dufwenberg, Martin and Patel, Amrish, Reciprocity Networks and the Participation Problem (July 29, 2014). CESifo Working Paper Series No. 4890, Available at SSRN: https://ssrn.com/abstract=2479811 or http://dx.doi.org/10.2139/ssrn.2479811

Martin Dufwenberg (Contact Author)

University of Arizona - Department of Economics ( email )

McClelland Hall
Tucson, AZ 85721-0108
United States

Amrish Patel

University of Gothenburg - Department of Economics and Statistics ( email )

Box 640
Vasagatan 1, E-building, floor 5 & 6
Göteborg, 40530
Sweden

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