Being the best or doing the right thing? An investigation of positional, prosocial and conformist preferences in provision of public goods

Based on a simple theoretical framework, we show that when individuals exhibit positional, prosocial or conformist preferences which are endogenous, the end outcomes in terms of private provision of public goods can differ significantly from traditional neo-classical predictions. Indeed, when a given individual selects a specific subset of preferences according to what others do, he/she will contribute positively to the public good provision. We provide anecdotal evidence to support our theoretical analysis by using data from an Internet survey on a sample of French individuals. Analyses of individual responses confirm our theoretical arguments. For instance, we show that relative concerns matter, that is, for several environmental goods, people might prefer polluting more in absolute terms but less than others in society. Moreover, we also test whether people exhibit a social desirability bias and show that they attribute more (less) positional (prosocial) concerns to others in society.

► Positional, prosocial and conformist preferences matter and may explain voluntary contribution to public goods. These preferences do not lead to identical contribution levels and thus do not have identical impacts on social welfare.
► For several environmental goods, people might prefer polluting more in absolute terms but less than others in society.
► People attribute more (less) positional (prosocial) concerns to others in society.