Abstract
This paper considers a population divided into two significantly-sized groups regarding the preferences its members have about a single public good. The public good equilibrium amount is that of the majority group in such a way that it is far from the Pareto-efficient one. This allows us to characterize a social loss function, which depends on the inter-group heterogeneity and the relative size of each group, parameters which also compound the degree of polarization. Our main conclusion is that, in general, higher levels of polarization do not imply higher social losses. This happens whenever the higher polarization is associated with higher inter-group heterogeneity, and the change in the amount of the public good in equilibrium implied is low enough.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
