A Network Approach to Public Goods

@article{Elliott2017ANA,
  title={A Network Approach to Public Goods},
  author={Matthew Elliott and Benjamin Golub},
  journal={Journal of Political Economy},
  year={2017},
  volume={127},
  pages={730 - 776}
}
Suppose that agents can exert costly effort that creates nonrival, heterogeneous benefits for each other. At each possible outcome, a weighted, directed network describing marginal externalities is defined. We show that Pareto efficient outcomes are those at which the largest eigenvalue of the network is 1. An important set of efficient solutions—Lindahl outcomes—are characterized by contributions being proportional to agents’ eigenvector centralities in the network. The outcomes we focus on… 

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