Abstract
We report experimental results on voluntary contributions to public-goods provision from situations in which parties can create institutions to impose a certain contribution level on its members. We focus on a public-goods game where the joint decisions inside the institution are made based on the plurality voting rule. We show that, comparing to the unanimity voting rule, the plurality rule results in a significant and large decrease in the institution initiation rate, along with a significant and large increase in the institution implementation rate. In the end, as the two effects cancel each other out, the choice of the voting rule does not significantly affect the average contribution level or efficiency.
Highlights
The provision of public goods relies on cooperation among agents who face a conflict between self-interest and social welfare
The average contribution rates range from 40% to 60%, they typically decline over time as the interaction is repeated [1]
Our goal is to find out whether the proposed mechanism based on the plurality rule can successfully balance participation and commitment, and increase the contribution level and the provision of public goods3
Summary
The provision of public goods relies on cooperation among agents who face a conflict between self-interest and social welfare. The average contribution rates range from 40% to 60% (of the initial endowment), they typically decline over time as the interaction is repeated [1]. Both theoretical and experimental research have expanded tremendously over the past decades in the direction of identifying possible ways to solve the free-riding problem and to improve efficiency. One possible way around this “classical conundrum” (as Bowles [2] prefers to call the social dilemma) is to create and rely on institutions that enforce high contribution levels. Participants first decide whether or not to participate in an institution which forces its members to contribute to the public goods at a level decided collectively. Non-members can decide how much to contribute on their own
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