On the Private Provision of Public Goods on Networks

20 Pages Posted: 23 Jun 2012

See all articles by Nizar Allouch

Nizar Allouch

Queen Mary, University of London

Date Written: June 22, 2012


This paper analyzes the private provision of public goods where consumers interact within a fixed network structure and may benefit only from their direct neighbors’ provisions. We present a proof for existence and uniqueness of a Nash equilibrium with general best-reply functions. Our uniqueness result simultaneously extends similar results in Bergstrom, Blume, and Varian (1986) on the private provision of public goods to networks and Bramoullé, Kranton, and D'Amours (2011) on games of strategic substitutes to nonlinear best-reply functions. In addition, we investigate the neutrality result of Warr (1983) and Bergstrom, Blume, and Varian (1986) whereby consumers are able to offset income redistributions and tax-financed government contributions. To this effect, we establish that the neutrality result has a limited scope of application beyond regular networks.

Keywords: Public Goods, Uniqueness Of Nash Equilibrium, Network Games, Neutrality, Bonacich Centrality, Main Eigenvalue

JEL Classification: C72, D31, H41

Suggested Citation

Allouch, Nizar, On the Private Provision of Public Goods on Networks (June 22, 2012). FEEM Working Paper No. 40.2012, Available at SSRN: https://ssrn.com/abstract=2089318 or http://dx.doi.org/10.2139/ssrn.2089318

Nizar Allouch (Contact Author)

Queen Mary, University of London ( email )

Mile End Road
London, London E1 4NS
United Kingdom

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