Optimal Altruism in Public Good Provision

38 Pages Posted: 21 Dec 2013 Last revised: 22 Jan 2014

See all articles by Robert W. Hahn

Robert W. Hahn

Technology Policy Institute; University of Oxford, Smith School

Robert Ritz

University of Oxford

Date Written: January 2014

Abstract

We present a model of altruistically-minded-yet rational-players contributing to a public good. A key feature is the tension between altruism and "crowding-out" effects (players' efforts are strategic substitutes). We find that more altruistic behaviour can raise or reduce welfare, depending on the fine details of the environment. It is almost always optimal for a player to act more selfishly than her true preference. We discuss "carbon leakage" and the "social carbon of carbon" in global climate policy, and applications to other public-good problems. Our results highlight that it may be difficult to infer social preferences from observed behaviour.

Keywords: altruism, climate policy, crowding out, public goods, social cost of carbon

JEL Classification: policy, economics

Suggested Citation

Hahn, Robert W. and Ritz, Robert, Optimal Altruism in Public Good Provision (January 2014). Available at SSRN: https://ssrn.com/abstract=2370259 or http://dx.doi.org/10.2139/ssrn.2370259

Robert W. Hahn (Contact Author)

Technology Policy Institute ( email )

1401 Eye St. NW
Suite 505
Washington, DC 20005
United States

University of Oxford, Smith School ( email )

Oxford
United Kingdom

Robert Ritz

University of Oxford ( email )

Mansfield Road
Oxford, Oxfordshire OX1 4AU
United Kingdom

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
100
Abstract Views
861
rank
362,596
PlumX Metrics