Proceedings of the 2023 International Conference on Economic Management,Financial Innovation and Public Service (EMFIPS 2023)

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

Authors
Hin Yu Micah Cheung1, *
1Department of Economics, New York University, New York, 10003, USA
*Corresponding author. Email: hc3833@nyu.edu
Corresponding Author
Hin Yu Micah Cheung
Available Online 21 June 2024.
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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Volume Title
Proceedings of the 2023 International Conference on Economic Management,Financial Innovation and Public Service (EMFIPS 2023)
Series
Advances in Economics, Business and Management Research
Publication Date
21 June 2024
ISBN
978-94-6463-441-9
ISSN
2352-5428
DOI
10.2991/978-94-6463-441-9_8How to use a DOI?
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.

Cite this article

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  -