Optimal altruism in public good provision

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 e¤ects (playerse¤orts are strategic substitutes). We \u85nd that more altruistic behaviour can raise or reduce welfare, depending on the \u85ne details of the environment. It is almost always optimal for a player to act more sel\u85shly than her true preference. We discuss applications to a range of public good problems, including global climate policy. Our results highlight that it may be di ¢ cult to infer social preferences from observed behaviour