Privately provided public goods in a large economy: The limits of altruism

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Abstract

Private charity has often been modelled as a pure public good. The results reported in this paper, however, suggest that this model of altruism fails to confirm even the broadest empirical observations about charity. In particular, as the size of the economy grows, the fraction contributing to the public good diminishes to zero. This and other results imply that this approach leads to a very limited model with little, if any, predictive power. A truly descriptive model of privately provided public goods must be generalized to include other non-altruistic motives for giving.

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    Thanks to Ted Bergstrom, Larry Blume, John Chamberlin, Russell Roberts, Robert Sugden, Hal Varian, the editor and two anonymous referees for helpful comments. Any errors are the responsibility of the author.

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