A Reconsideration of the Group-Size Paradox of the Public Goods Game

This paper attempts to explain the paradoxical finding between the group size and the amount of contributions in the public goods game by using difference equations. Previous studies find that as the group size increases, players contribute more amount to the public fund, which is intuitively contradictory. This paper attempts to resolve this paradox by focusing on each player’s adjustment speed of their amount of contributions. Based on the assumption that the speed decreases as the group size increases, this paper shows that the amount of contributions remains high throughout the entire period of the game if the group size is large. Thus, this paper hints that what was found in the previous studies was not the effect of the group size per se. Rather, they might have identified the effect of the speed of the adjustments