Asymmetric effects of social and economic incentives on cooperation in real effort based public goods games.

Abstract

Many practitioners as well as researchers explore promoting environmentally conscious behavior in the context of public goods systems. Numerous experimental studies revealed various types of incentives to increase cooperation on public goods. There is ample evidence that monetary and non-monetary incentives, such as donations, have a positive effect on cooperation in public goods games that exceeds fully rational and optimal economic decision making. Despite an accumulation of these studies, in the typical setting of these experiments participants decide on an allocation of resources to a public pool, but they never exert actual effort. However, in reality, we often observe that players’ real effort is required in these public goods game situations. Therefore, more analysis is needed to draw conclusions for a wider set of incentive possibilities in situations similar to yet deviating from resource allocation games. Here we construct a real effort public goods game in an online experiment and statistically analyze the effect different types of incentives have on cooperation. In our experiment, we examine combinations of monetary and social incentives in a setting aimed closer to practical realities, such as financial costs and real effort forming part of the decision to cooperate on a public good. In our real effort public goods game participants cooperate and defect on image-scoring tasks. We find that in our setting economic and social incentives produce an asymmetric effect. Interestingly economic incentives decreased the share of highly uncooperative participants, while social incentives raised the share of highly cooperative participants.