Experiments on the Provision of Public Goods. I. Resources, Interest, Group Size, and the Free-Rider Problem

Abstract

For an experiment on the problem of collective action, randomly selected high school students were randomly assigned to groups which were confronted with an investment opportunity. Each subject could invest resources provided by the experimenter in either a private good, which returned a fixed amount of money to the individual per token invested, or a public good. The public good returned money to the group and, beyond a given provision point, returned much more money per token invested than did the private good. All money from the public good was divided according to a present formula. Thus, subjects could "free ride" on the public good, if other group members invested in it, by taking their share of it and keeping their own resources for themselves. Groups were randomly designated as either large or small, and unequal or equal in the distribution of interest and of resources within the group. Results indicate that the effects of free riding were much weaker than would be predicted from most economic theory. As predicted from the theory, however, small groups containing an individual whose interest in the public good exceeded the cost of its provision (i.e., small, unequal-interest groups) invested more in the public good than any other type of group. No additional significant effects of group size or interest or resource distribution were found.