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UNU-WIDER WP/2012/59 The Effects of Group Composition and Fractionalization in a Public Goods Game: An Agent-Based Simulation

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A teenager wears torn rubber boots in a muddy local market in Bac Ha, Viet Nam. As of 2005 figures, half the world population—more than 3 billion people–is estimated to live on less than USD 2.50 a day. Bac Ha, Viet Nam. UN Photo/Kibae Park.

Table of contents

WP/059 The Effects of Group Composition and Fractionalization in a Public Goods Game: An Agent-Based Simulation

Behavioural economics highlights the role of social preferences in economic decisions. Further, populations are heterogeneous; suggesting that group composition may impact the ability to sustain voluntary public goods contributions. This parallels research in public economics where fractionalization negatively impacts provision. We conduct agent-based simulations of contributions in a public goods game, varying group composition and the weight individuals place on their beliefs versus their underlying social preference type. We then examine the effect of each of these factors on contributions. We find fractionalization in social preference types negatively impacts provision, even controlling for the share of types in a group.
Publisher:
UNU-WIDER
Series:
WIDER Working Paper
Volume:
2012/59
Title:
WP/059 The Effects of Group Composition and Fractionalization in a Public Goods Game: An Agent-Based Simulation
Authors:
Pablo Lucas, Angela C.M. de Oliveira, and Sheheryar Banuri
Publication date:
June 2012
ISBN 13 Web:
978-92-9230-522-2
Copyright holder:
© UNU-WIDER
Copyright year:
2012
Keywords:
social preferences, agent-based simulation, group composition, beliefs
JEL:
C63, D03, H41, I3
Project:
New Approaches to Measuring Poverty and Vulnerability
Sponsor:
UNU-WIDER gratefully acknowledges the financial contributions to the research programme by the governments of Denmark (Ministry of Foreign Affairs), Finland (Ministry for Foreign Affairs), Sweden (Swedish International Development Cooperation Agency—Sida), and the United Kingdom (Department for International Development).
Format:
online

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