Contributions To Public Goods Research Articles

Heterogeneous productivity stabilizes public good contributions under certainty, uncertainty and ambiguity

Typically, a linear public goods game with a voluntary contribution mechanism (VCM) sees declining contributions over repeated one-shot periods of play. However, contributions under uncertainty or ambiguity over heterogeneous productivity on individual contributions have yet to be investigated. We compare contributions under homogenous productivity of 0.6; and certain, uncertain (for future periods only and all periods) or ambiguous heterogeneity in productivity, which can be either a high (0.9) or a low (0.3) type. Certain heterogeneity unexpectedly stabilizes contributions over homogenous, led by high productivity types. Uncertain or ambiguous heterogeneity in productivity weakly lowers contributions, but they remain stable. Thus, in a novel finding that is replicated across our treatments, heterogeneous productivity appears to support stable contributions over time, even when productivity is unknown at time of contribution. This finding suggests uncertain and heterogeneous productivity are an important characteristic of public goods that needs to be considered when modelling them in the field, and reinforces the role of productivity itself in driving voluntary public good contributions.

Group composition of income types and the absolute-relative framing of public good contributions

This paper examines the effect of absolute-relative framing on contributions to a public good. Group members have high and low endowments and the number of high-income members in each group varies between treatments. They make contributions without and with a minimum contribution level. We express the contribution metric either in absolute amount or as a relative proportion of a member's initial endowment. We propose that these institutional designs affect contribution behavior through shifting reference points in decisions. First, as the number of high-type members increases, the average contribution increases, especially among the low-type members in absolute framing. Second, relative framing makes the contribution proportions between high and low types move closer than in absolute framing. Third, the difference in contributions between absolute and relative conditions mostly disappears when the minimum contribution level is introduced. We show that the effects of group members’ endowments, relative framing, and the MCL policy represent the internal, external and the institutional reference point respectively with increasing strength.

Confusion cannot explain cooperative behavior in public goods games

Some scholars find that behavioral variation in the public goods game is explained by variations in participants' understanding of how to maximize payoff and that confusion leads to cooperation. Their findings lead them to question the common assumption in behavioral economics experiments that choices reflect motivations. We conduct two experiments, in which we minimize confusion by providing participants with increased training. We also introduce a question that specifically assesses participants' understanding of payoff maximization choices. Our experimental results show that the distribution of behavior types is significantly different when participants play with computers versus humans. A significant increase in contributions is also observed when participants play with humans compared to when they play with computers. Moreover, social norms may be the main motive for contributions when playing with computers. Our findings suggest that social preferences, rather than confusion, play a crucial role in determining contributions in public goods games when playing with humans. We therefore argue that the assumption in behavioral economics experiments that choices reveal motivations is indeed valid.

Motivation Crowding in Peer Effects: The Effect of Solar Subsidies on Green Power Purchases

Abstract I test whether economic incentives impact peer effects in public-good settings. I study how a visible and subsidized contribution to a public good (installing solar panels) affects peer contributions to the same good that are neither subsidized nor visible (electing green power). Exploiting spatial variation in the feasibility of installing solar panels, I find that on average panels increase voluntary purchases of green power by neighbors. However, when subsidies to solar are high, solar panels reduce peer contributions. The results support the hypothesis that signals drive peer responses to visible public-good contributions and that economic incentives alter those signals.

Incentivizing cooperation against a norm of defection: Experimental Evidence from Egypt

Voluntary cooperation contributes significantly to development and prosperity. Settings where the social norm is free-riding, however, offer a particular challenge for public goods contribution. In this paper we ask two questions: how could high contributors to public goods in such contexts be encouraged to sustain their contributions against a defecting crowd? Second, how can low contributors – who are abundant in such milieus – be lured to increase their contributions without expensive institutional interventions or major structural transformations? To answer these questions, we conducted three public good experiments with 456 subjects in Egypt. In the first experiment, we find that priming high cooperators with a message that makes them take pride in being among the minority of cooperators increases contributions, albeit with a lag. In the second and third experiments, we test how far three possible appeal messages – emphasizing religious, patriotic, or social harm– could drive low cooperators to increase their contributions. We show that using such messages does increase contributions significantly.

Cost-(in)effective public good provision: an experimental exploration

This paper investigates the determinants of cost-(in)effective giving to public goods. We conduct a pre-registered experiment to elucidate how factors at the institutional and individual levels shape individual contributions and the cost-effectiveness of those contributions in a novel public good game. In particular, we examine the role of consequential uncertainty over the value of public good contributions (institutional level) as well as individual characteristics like risk and ambiguity attitudes, giving type, and demographics (individual level). We find cost-ineffective contributions in all institutions, but total contribution levels and the degree of cost-ineffectiveness are similar across institutions. Meanwhile, cost-effectiveness varies by giving type—which is a novel result that is consistent with hypotheses we generate from theory—but other individual characteristics have little influence on the cost-effectiveness of contributions. Our work has important positive and normative implications for charitable giving and public good provision in the real world, and it is particularly germane to emerging online crowdfunding and patronage platforms that confront users with a multitude of competing opportunities for giving.

Incomplete punishment networks, heterogeneity, and cooperation in public good experiments

This study conducts laboratory experiments to explore the effect of punishment on public good contributions when individuals have heterogeneous marginal per capita returns on the public good under different punishment networks. According to the experimental results, we find that the structure of punishment network affects the contribution decision and punishment behavior. Among the punishment networks investigated in this study, the circle and homo-pairwise punishment networks have significantly higher effectiveness at improving the cooperation level. We also find that the complete punishment network leads to lower punishment severity and efficiency than the incomplete punishment networks.

Group Composition of Income Types and the Absolute-Relative Framing of Public Good Contributions

Group Composition of Income Types and the Absolute-Relative Framing of Public Good Contributions

Indicators of Higher Education and the Public Good in Africa: A Dashboard Approach

Indicators and metrics have gained increasing prominence in international higher education in recent years, and global rankings have become a powerful force in shaping ideas of what the university is and should be. Yet these measures do a poor job of capturing the broad role of the institution, and particularly in recognising its actions in promoting the public good and addressing inequalities. African higher education institutions have struggled to perform well in the conventional rankings, whose indicators rely on extensive resources for high-level research. This article explores the possibilities of alternative metrics for understanding the public good contribution of universities in the context of four African countries: Ghana, Kenya, Nigeria and South Africa. After assessing the shortcomings of the existing indicators and metrics, and the challenges of the availability of data, it puts forward a dashboard approach as a possible new model. Dashboards have the advantage of avoiding the conflation of diverse qualities of importance and allow different profiles of an institution to be compared. The article proposes six main elements for the dashboard: solidarity with society, equitable access and deliberative space (which correspond to the intrinsic notion of public good and graduate destinations, knowledge production and community engagement (which correspond to instrumental notions). Finally, the challenges of implementing public good metrics in practice are discussed.

Nudges and compensation: Evaluating experimental evidence on controlling rice straw burning

The customary occurrence of crop residue burning substantially increases air pollution. We examine the effects of nudges and cash compensation in curbing this practice using a field experiment in the rice-growing region of northern India. Information treatments include positively-framed and negatively-framed social norms and environmental awareness nudges. We identify the effects of information with and without cash transfers for manifestly avoiding residue burning. We show that cash compensation and two types of nudges – positively-framed social norms and environmental awareness – significantly reduce residue burning. We observe a stronger impact from cash compensation than nudges, and that these effects complement each other. Policymakers should take advantage of the complementarity between these interventions, particularly when low-cost informational nudges can potentially reduce environmentally harmful practices. This paper adds to the narrative on information framing effects in field experiments and discusses how nudges and extrinsic incentives could augment each other in public good contributions.

IRREVERSIBILITY AND MONITORING IN DYNAMIC GAMES: EXPERIMENTAL EVIDENCE

AbstractThis article provides experimental evidence on the impacts of irreversibility and imperfect monitoring on the efficiency and the equity of a repeated public goods game. We find that irreversibility and imperfect monitoring both lead to inefficient and unequal outcomes through different channels. Irreversibility lowers public goods contribution in earlier periods and makes the initial‐period contribution gap between two players long‐lasting. Imperfect monitoring hampers conditional cooperation and persistently reduces group contribution. A finite mixture estimation with conditional cooperators provides a coherent account of the treatment effects.

Inequality, Outreach, and Impact in Public Goods Contributions

Mobilizing domestic resources is vital in financing domestic investment and social programmes, which are essential for reducing poverty in developing countries. We consider citizens’ willingness to contribute to public goods as one mechanism for domestic resource mobilization. In particular, we are interested in how willingness to contribute varies on three dimensions: inequality in initial endowments, public good outreach (local vs. national), and the expected impact of giving. We conducted a preregistered (AEARCTR-0007746) online experiment with a sample of 900 respondents in South Africa. First, public goods game tasks with equal and unequal endowments were compared to estimate inequality impacts. Second, a dictator game decision with donations to a national charity was compared to the local public goods game to study the effect of project outreach. Finally, to estimate donation impact, charity decisions with quadrupled contributions were compared to those with doubled contributions. We find overall high levels of contribution, with much overlap across the different contexts considered. We note that the highest endowment proportion is contributed in the unequal context, with low endowment players giving the highest share of their endowments. Response time data shows that decisions take longer where donation impact is higher, and where endowments are unequal, particularly for those receiving lower endowments.

Competition among public good providers for donor rewards.

We present experimental evidence for decision settings where public good providers compete for endogenous rewards which are donations (transfers) offered by outside donors. Donors receive benefits from public good provision but cannot provide the good themselves. The performance of three competition mechanisms is examined in relation to the level of public good provision and transfers offered by donors. In addition to a contest where transfers received by public good providers are proportional to effort, we study two contests with exclusion from transfers, namely a winner-takes-all and a loser-gets-nothing. We compare behavior in these three decision settings to the default setting of no-contest (no-transfers). Results for this novel decision environment with endogenous transfers show that donors offer transfers (contest prizes) at similar levels across contests and contributions to the public good are not significantly different in the three contests settings, but are consistently and significantly higher in all contests compared to the setting with no-transfers. Initially, the winner-takes-all setting leads to a significantly higher increase in public good contributions compared to the other two contests; but this difference diminishes across decision rounds.Supplementary InformationThe online version contains supplementary material available at 10.1007/s10683-022-09766-7.

Acquisition, Aggregation, and Sharing of Information in Sequential-Move Aggregative Games

We study quadratic payoff common-value sequential-move aggregative games with signaling. Applications include Stackelberg quantity-setting, public good contribution, common resource, gas emission, and manufacturer-retailer games. Whereas efficient aggregation of information occurs in large Stackelberg markets, it does not occur in the four remaining large markets. If all agents share their information with their followers, expected welfare increases in the Stackelberg and supply chain games and it decreases in the remaining three games. Finally, we characterize the conditions for payoffs and welfare to increase with more precise private or public information. We also provide robustness checks when the values are private. (JEL C70, D43, D82, D83, H41, Q21, Q54)

The Impact of Symbolic Award Introductions on Contribution Behavior in Online Communities

Online communities frequently suffer from the under-contribution of knowledge in terms of both quantity as well as quality. A common method to incentivize contribution behavior by members is the use of non-monetary rewards, more specifically performance contingent symbolic awards. However, a nuanced understanding of how performance contingent symbolic awards affect existing community members that differ in their experience, and by extension propensity to contribute, is currently lacking. In this paper we exploit a natural experiment, analyzing a user-week panel data set of 166,000 observations, spanning 48 weeks and over 3000 community members, and show a negative effect of award introduction on contribution quantity and an insignificant effect on contribution quality on average. Moreover, we are able to show how accounting for heterogeneous user characteristics in terms of within-community experience, govern the effect of award introduction and knowledge accumulation. In particular, we find that low experience members significantly reduce their contribution quality while not changing their contribution amount, and high experience members reduce their contribution quantity without decreasing their contribution quality. Thus, this research contributes to the theory on new forms of organizing, in addition to advancing the literature on symbolic awards and online public goods contributions.

“Unus pro omnibus, omnes pro uno”: understanding unauthorised file sharing in online communities from a public goods contribution perspective

PurposeUnauthorised file sharing (UFS) in online communities (OCs) is a major intellectual property concern. Researchers have traditionally viewed UFS as digital piracy and have suggested that deterrents, such as legal actions, should be in place. However, previous research has not considered the OC context and cannot explain why OC members share unauthorised files even when there is legislation against this in place. In OCs, UFS exhibits features of public goods contribution. Therefore, the authors claim that public goods contribution motivations can provide a compelling explanation for UFS in OCs.Design/methodology/approachThe authors propose a theoretical model in which two egoistic public goods contribution motivations (namely, warm-glow giving and demand for resources) are tested alongside motivations informed by the sanctions described by deterrence theory, a theory widely used within the digital piracy perspective.FindingsThe authors find that warm glow and demand for resources are positively related to UFS in OCs; the effect of warm glow is moderated by users' attachment to OCs. Importantly, the results suggest that although sanctions significantly predict UFS, the effect of sanctions on UFS becomes insignificant in the presence of warm glow, demand for resources and attachment.Originality/valueThe study offers new insights into why users engage in UFS and highlights that public goods contribution should be taken into account in developing anti-piracy policies and practices.

Limited‐tenure concessions for collective goods

We analyze theoretically an institution called a “limited-tenure concession” for its ability to induce efficient public goods contribution and common-pool resource extraction. The basic idea is that by limiting the tenure over which an agent can enjoy the public good, but offering the possibility of renewal contingent on ample private provision of that good, efficient provision may be induced. We first show in a simple repeated game setting that limited-tenure concessions can incentivize socially-efficient provision of public goods. We then analyze the ability of this instrument to incentivize the first best provision for common-pool natural resources such as fish and water, thus accounting for spatial connectivity and growth dynamics of the resource. The duration of tenure and the dispersal of the resource play pivotal roles in whether this limited-tenure concession induces the socially optimal private provision. Finally, in a setting with costly monitoring, we discuss the features of a concession contract that ensure first-best behavior, but at least cost to the implementing agency.

Common knowledge promotes cooperation in the threshold public goods game by reducing uncertainty

Recent work suggests that an important cognitive mechanism promoting coordination is common knowledge—a heuristic for representing recursive mental states. Yet, we know little about how common knowledge promotes coordination. We propose that common knowledge increases coordination by reducing uncertainty about others' cooperative behavior. We examine how common knowledge increases cooperation in the context of a threshold public goods game, a public good game in which a minimum level of contribution—a threshold—is required. Across three preregistered studies (N = 5580), we explored how varying (1) the information participants had regarding what their group members knew about the threshold and (2) the threshold level affected contributions. We found that participants were more likely to contribute to the public good when there was common knowledge of the threshold than private knowledge. Participants' predictions about the number of group members contributing to the public good and their certainty ratings of those predictions mediated the effect of information condition on contributions. Our results suggest that common knowledge of the threshold increases public good contributions by reducing uncertainty around other people's cooperative behavior. These findings point to the influential role of common knowledge in helping to solve large-scale cooperation problems.

Communities and testing for COVID-19.

The response to the COVID-19 epidemic requires people to undertake actions such as mask-wearing or vaccination that also confer benefits to the whole community, and therefore, are akin to public good contributions. This is the case also for participation to the mass testing that took place between November 18th and 25th, 2020 in the South Tyrol region of Italy, where 361,781 out of 500,607 (72.3%) eligible residents volunteered to take a COVID-19 rapid antigen test. We examine the community characteristics that are associated with higher testing rates. Our findings point to a number of key community determinants of people’s willingness to volunteer. Convenience and social capital were important factors. Beyond that, socioeconomic status and religiosity were also both positively related to greater testing, while childhood vaccinations refusal rates show a negative relationship.

Leveraging the Honor Code: Public Goods Contributions under Oath

Public good games are at the core of many environmental challenges. In such social dilemmas, a large share of people endorse the norm of reciprocity. A growing literature complements this finding with the observation that many players exhibit a self-serving bias in reciprocation: “weak reciprocators” increase their contributions as a function of the effort level of the other players, but less than proportionally. In this paper, we build upon a growing literature on truth-telling to argue that weak reciprocity might be best conceived not as a preference, but rather as a symptom of an internal trade-off at the player level between (i) the truthful revelation of their private reciprocal preference, and (ii) the economic incentives they face (which foster free-riding). In truth-telling experiments, many players misrepresent private information when this is to their material benefit, but to a significantly lesser extent than what would be expected based on the profit-maximizing strategy. We apply this behavioral insight to strategic situations, and test whether the preference revelation properties of the classic voluntary contribution game can be improved by offering players the possibility to sign a classic truth-telling oath. Our results suggest that the honesty oath helps increase cooperation (by 33% in our experiment). Subjects under oath contribute in a way which is more consistent with (i) the contribution they expect from the other players and (ii) their normative views about the right contribution level. As a result, the distribution of social types elicited under oath differs from the one observed in the baseline: some free-riders, and many weak reciprocators, now behave as pure reciprocators.