Public Goods in Information Cascades: Is There Still a Free Rider Problem?

DOI

10.2991/978-94-6463-441-9_8How to use a DOI?

Keywords

Public Goods; Information Cascade; Free-rider

Abstract

The phase “public goods” has been with the theories of economics for quite a long time and there are multiple ways to analyze and interpret why these goods will cause the free-rider problem. This paper suggests a variant of the basic information cascade game by introducing an idea of mutual benefit such that for each player, he receives benefit partially from himself making a correct choice and the last person making the correct choice. It is possible to design a information cascade game such that the final payoff for each player is both non-rival and non-excludable to satisfy the definition of a public good. By observing the results, we can prove that the free-rider problem still exists through a different approach. Moreover, it is possible to adjust and refine the model into such a way that even when the collective gain for each person is much larger than the private sacrifice for the person to do so, the free-rider problem still exist. In this paper, we Observe the key features of a public good and observe whether it is possible for us to obtain similar features in an information cascade game, propose a variant of the basic information cascade game, explore the threshold value for some important parameters, extend the model from 4 person to infinite and test whether it is still viable. Prove that it is possible to explain the free-rider problem in the context of information cascades, thus showing that the free-rider problem can be explained by information cascades.

Copyright

© 2024 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Hin Yu Micah Cheung
PY  - 2024
DA  - 2024/06/21
TI  - Public Goods in Information Cascades: Is There Still a Free Rider Problem?
BT  - Proceedings of the 2023 International Conference on Economic Management，Financial Innovation and Public Service (EMFIPS 2023)
PB  - Atlantis Press
SP  - 73
EP  - 83
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-441-9_8
DO  - 10.2991/978-94-6463-441-9_8
ID  - Cheung2024
ER  -