Threshold uncertainty in discrete public good games: an experimental study

Abstract

A discrete public good is provided when total contributions equal or exceed the contribution threshold. Recent theoretical work shows that an increase in threshold uncertainty will increase (decrease) equilibrium contributions when the public good value is sufficiently high (low). In an experiment designed to test these predictions, I find only limited verification of the prediction. Using elicited beliefs data to represent subjects’ beliefs, I find that behavior is not consistent with expected payoff maximization, however, contributions are increasing in subjects’ subjective pivotalness. Thus, wider threshold uncertainty will sometimes—but not always—hinder collective action.