A Public Goods Game in the Era of COVID-19: Free-Riders, Cooperators, & Thresholds

Abstract

Consistent behavior in Public Goods Games is well documented in the Game Theory literature. Typically, in a Single-Shot Public Goods Game, the dominant strategy is to free ride and contribute nothing towards the Public Good. However, we do not necessarily see this in reality, or even within this experiment. However, when we introduce a dynamic aspect to the experiment in the form of a Repeat-Play Public Goods Game, we witness that with succeeding rounds, players converge around the equilibrium predicted by the Single-Shot game. This is attributed to the effect that learning has on contribution patterns. We hypothesize that with multiple iterations of the Single-Shot game, players learn about incentives to free ride, decreasing their contributions in subsequent rounds of the game. Further, such learning is contagious, as can be seen from the experiment, diffusing across an entire group of players, despite there being a lack of communication. Learning can help provide an explanation as to why there is a divergence between theoretical and actual behavior.