# Public goods in networks with constraints on sharing

## TL;DR

This paper models social networks where individuals decide how much of a shareable good to provide and whom to share with, revealing that increased shareability can paradoxically reduce overall efficiency.

## Contribution

It introduces a novel model of public goods sharing with network constraints and proves the existence of specialized Nash equilibria in this setting.

## Key findings

- Existence of pure strategy Nash equilibria with free riders and contributors
- Increased shareability can decrease social efficiency
- Relaxing sharing constraints affects equilibrium outcomes

## Abstract

This paper considers incentives to provide goods that are partially shareable along social links. We introduce a model in which each individual in a social network not only decides how much of a shareable good to provide, but also decides which subset of neighbours to nominate as co-beneficiaries. An outcome of the model specifies an endogenously generated subnetwork of the original network and a public goods game occurring over the realised subnetwork. We prove the existence of specialised pure strategy Nash equilibria: those in which some individuals contribute while the remaining individuals free ride. We then consider how the set of efficient specialised equilibria vary as the constraints on sharing are relaxed and we show that, paradoxically, an increase in shareability may decrease efficiency.