Social network and private provision of public goods

International audienceWe use a simple model of private voluntary contributions to a public good with interdependent individual utilities to study the effect of social network on provision of a public good. Agents in our model have choice between investment in global public good and private consumption, which due to interdependence of individual utilities can be seen as a local public good. Assuming interior solution we characterize Nash equilibrium in terms of the structure of the social network. An individual who is better connected to different parts of the network and whose own ego-network is sparse contribute to public good more than an individual with larger and densely connected ego-network