h Interaction, and Public Goods

This paper considers the private provision of a public good within a community, whose members are inclusive Kantian or Nashian optimizers. It is analyzed how a change in group size affects the mixed Kant-Nash equilibrium. Kantians face a trade-off when admitting a Nashian into the community. Even though the new member is a contributor, there is a negative externality, as the Kantians' hypothetical cost of public good provision falls in group size. This can lead to a lower utility of Kantian individuals.