Social Dilemmas and the Emergence of Cooperation in Financing Public Goods

Social dilemmas in economics characterize situations of social interaction in which the contradiction between individual and collective rationality occur in the classical game theory. In the case of financing public good, analyzed from the viewpoint of the Prisoner’s Dilemma to many players, this study highlights how social preferences determine the emergence of cooperation in accordance with the different results of experimental studies. The current study contributes to the literature with the aim of broadening our sight of the emergence of collaborative behaviors by taking into account the question of the nature of individual preferences and seeking to integrate the intentions and emotions of the players when seeking a conditionally efficient equilibrium which could be qualitatively greater than the Pareto optimal allocation. This paper provides a comprehensive analysis and discussion of the importance of adopting a collaborative behavior for providing an efficient solution to the problem of financing public goods when social dilemmas arise.