Free riding with discrete and continuous public goods: Some experimental evidence

Abstract

Two experimental designs were employed in which subjects were offered either a "dis- crete" public good, for which group contributions must meet a provision point before subjects receive payoffs; and a "continuous" public good, which returned 30 percent of group contribu- tions to each subject at all contributions levels. Free riding, or non-contribution, is a dominant strategy in the continuous case. Non-contribution is not a dominant strategy in the discrete case; there are multiple equilibria. Contribution levels were similar in both cases, and did not vary significantly with method of pay- ment (hypothetical versus real money); earnings, however, were higher in the continuous and real- money versions of the experiment. Subjects' demographic characteristics made little difference to contribution patterns. The most significant determinant of contributions was the round of the "game." Roughly speaking, subjects contributed less the longer they played, regardless of other factors.