Real-effort in the Multilevel Public Goods Game

Abstract

Abstract We investigate the extent to which a real-effort effect and an inequality effect impact individuals’ prosocial behavior in the multilevel public goods game. We explore two symmetrical treatments: one where everyone participates in a preliminary task to obtain their initial endowment, and another where no one does, to assess the real-effort effect. Additionally, we examine two asymmetrical treatments where only individuals from one local group engage in the preliminary task to study the inequality effect. We find evidence that the contribution to the local public good is stable across all treatments, while the contribution to the global public good is significantly lower when both groups perform the preliminary task.