A public good model with lotteries in large groups

Abstract

We analyze the effect of a large group on a public goods model with lotteries. We show that as populations get large, and with preferences in which individuals only care about their private consumptions and the total supply of the public good, the level of contributions converges to the one given by voluntary contributions. With preferences of the warm glow type, the contributions converge to a level strictly higher than those given by voluntary contributions, even though in general they do not yield first-best levels.