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TOPIC:
DIFFERENTIATED PUBLIC GOODS
ABSTRACT
A model of differentiated public goods helps resolve all three empirical puzzles regarding charity donations documented in Andreoni’s (1988) “The Limits of Altruism”. Government contributions to charitable activities can even crowd in, instead of crowd out, private giving. A diverse society is conceptually different from a polarized one, with more (less) charity donations in the former (latter) than in a homogeneous society. Like any profit-seeking entrepreneurs, activist entrepreneurs also face a product-design problem of how to package differentiated public goods into bundles to maximize donations.
Keywords:Public goods, altruism, crowding in, diversity, polarization, product design, bundling.