IDEAS home Printed from https://ideas.repec.org/a/eee/ecolet/v134y2015icp29-33.html
   My bibliography  Save this article

The consequences of a refund in threshold public good games

Author

Listed:
  • Cartwright, Edward
  • Stepanova, Anna

Abstract

We revisit the question of whether a refund increases efficiency in threshold public good games. New experimental evidence is presented on the effect of endowment size. We demonstrate that a refund increases efficiency if and only if the endowment is small relative to the threshold. We also propose a novel way to analyze the effect of a refund. Specifically, we argue that a refund increases efficiency only if significantly many groups converge towards zero contributions in the absence of a refund.

Suggested Citation

  • Cartwright, Edward & Stepanova, Anna, 2015. "The consequences of a refund in threshold public good games," Economics Letters, Elsevier, vol. 134(C), pages 29-33.
    • Handle: RePEc:eee:ecolet:v:134:y:2015:i:c:p:29-33
    DOI: 10.1016/j.econlet.2015.05.032
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0165176515002372
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.econlet.2015.05.032?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Bram Cadsby, Charles & Maynes, Elizabeth, 1998. "Choosing between a socially efficient and free-riding equilibrium: Nurses versus economics and business students," Journal of Economic Behavior & Organization, Elsevier, vol. 37(2), pages 183-192, October.
    2. Julian Rauchdobler & Rupert Sausgruber & Jean-Robert Tyran, 2010. "Voting on Thresholds for Public Goods: Experimental Evidence," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 66(1), pages 34-64, March.
    3. Rachel Croson & Melanie Marks, 2000. "Step Returns in Threshold Public Goods: A Meta- and Experimental Analysis," Experimental Economics, Springer;Economic Science Association, vol. 2(3), pages 239-259, March.
    4. Mark Bagnoli & Barton L. Lipman, 1989. "Provision of Public Goods: Fully Implementing the Core through Private Contributions," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 56(4), pages 583-601.
    5. Tavoni, Alessandro & Dannenberg, Astrid & Kallis, Giorgos & Löschel, Andreas, 2011. "Inequality, communication and the avoidance of disastrous climate change," LSE Research Online Documents on Economics 37570, London School of Economics and Political Science, LSE Library.
    6. Cadsby, Charles Bram & Maynes, Elizabeth, 1999. "Voluntary provision of threshold public goods with continuous contributions: experimental evidence," Journal of Public Economics, Elsevier, vol. 71(1), pages 53-73, January.
    7. Rapoport, Amnon & Eshed-Levy, Dalit, 1989. "Provision of step-level public goods: Effects of greed and fear of being gypped," Organizational Behavior and Human Decision Processes, Elsevier, vol. 44(3), pages 325-344, December.
    8. Mohamed Bchir & Marc Willinger, 2013. "Does a membership fee foster successful public good provision? An experimental investigation of the provision of a step-level collective good," Public Choice, Springer, vol. 157(1), pages 25-39, October.
    9. Federica Alberti, 2015. "Does the Endowment of Contributors Make a Difference in Threshold Public-Good Games?," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 71(2), pages 216-239, June.
    10. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer;Economic Science Association, vol. 10(2), pages 171-178, June.
    11. Hampton, Jean, 1987. "Free-Rider Problems in the Production of Collective Goods," Economics and Philosophy, Cambridge University Press, vol. 3(2), pages 245-273, October.
    12. Charles Cadsby & Rachel Croson & Melanie Marks & Elizabeth Maynes, 2008. "Step return versus net reward in the voluntary provision of a threshold public good: An adversarial collaboration," Public Choice, Springer, vol. 135(3), pages 277-289, June.
    13. R. Isaac & David Schmidtz & James Walker, 1989. "The assurance problem in a laboratory market," Public Choice, Springer, vol. 62(3), pages 217-236, September.
    14. Dawes, Robyn M. & Orbell, John M. & Simmons, Randy T. & Van De Kragt, Alphons J. C., 1986. "Organizing Groups for Collective Action," American Political Science Review, Cambridge University Press, vol. 80(4), pages 1171-1185, December.
    15. Coats, Jennifer C. & Gronberg, Timothy J. & Grosskopf, Brit, 2009. "Simultaneous versus sequential public good provision and the role of refunds -- An experimental study," Journal of Public Economics, Elsevier, vol. 93(1-2), pages 326-335, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Grigoriadis, Theocharis, 2017. "Religion, administration & public goods: Experimental evidence from Russia," Economic Modelling, Elsevier, vol. 66(C), pages 42-60.
    2. Daniele Nosenzo & Fabio Tufano, 2015. "Entry or Exit? The Effect of Voluntary Participation on Cooperation," Discussion Papers 2015-20, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    3. Edward Cartwright & Anna Stepanova, 2017. "Efficiency in a forced contribution threshold public good game," International Journal of Game Theory, Springer;Game Theory Society, vol. 46(4), pages 1163-1191, November.
    4. Federica Alberti & Edward J. Cartwright, 2016. "Full agreement and the provision of threshold public goods," Public Choice, Springer, vol. 166(1), pages 205-233, January.
    5. Federica Alberti & Anna Cartwright & Edward Cartwright, 2021. "Predicting Efficiency in Threshold Public Good Games: A Learning Direction Theory Approach," Working Papers in Economics & Finance 2021-01, University of Portsmouth, Portsmouth Business School, Economics and Finance Subject Group.
    6. Quan, Ji & Liu, Wei & Chu, Yuqing & Wang, Xianjia, 2018. "Stochastic dynamics and stable equilibrium of evolutionary optional public goods game in finite populations," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 502(C), pages 123-134.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Federica Alberti & Edward J. Cartwright, 2016. "Full agreement and the provision of threshold public goods," Public Choice, Springer, vol. 166(1), pages 205-233, January.
    2. Federica Alberti & Anna Cartwright & Edward Cartwright, 2021. "Predicting Efficiency in Threshold Public Good Games: A Learning Direction Theory Approach," Working Papers in Economics & Finance 2021-01, University of Portsmouth, Portsmouth Business School, Economics and Finance Subject Group.
    3. James Andreoni & Laura Gee, 2015. "Gunning for efficiency with third party enforcement in threshold public goods," Experimental Economics, Springer;Economic Science Association, vol. 18(1), pages 154-171, March.
    4. Bougherara, Douadia & Denant-Boemont, Laurent & Masclet, David, 2011. "Cooperation and framing effects in provision point mechanisms: Experimental evidence," Ecological Economics, Elsevier, vol. 70(6), pages 1200-1210, April.
    5. Todd Cherry & David McEvoy, 2013. "Enforcing Compliance with Environmental Agreements in the Absence of Strong Institutions: An Experimental Analysis," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 54(1), pages 63-77, January.
    6. Edward Cartwright & Anna Stepanova, 2017. "Efficiency in a forced contribution threshold public good game," International Journal of Game Theory, Springer;Game Theory Society, vol. 46(4), pages 1163-1191, November.
    7. Federica Alberti & Werner Güth & Kei Tsutsui, 2020. "Experimental effects of institutionalizing co-determination by a procedurally fair bidding rule," Working Papers in Economics & Finance 2020-10, University of Portsmouth, Portsmouth Business School, Economics and Finance Subject Group.
    8. Bose, Bijetri & Rabotyagov, Sergey, 2018. "Provision of public goods using a combination of lottery and a provision point," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 73(C), pages 99-115.
    9. Douadia Bougherara & Laurent Denant-Boèmont & David Masclet, 2007. "Creating vs. maintaining threshold public goods in conservation policies," Post-Print halshs-00175879, HAL.
    10. Julian Rauchdobler & Rupert Sausgruber & Jean-Robert Tyran, 2010. "Voting on Thresholds for Public Goods: Experimental Evidence," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 66(1), pages 34-64, March.
    11. Charles Cadsby & Rachel Croson & Melanie Marks & Elizabeth Maynes, 2008. "Step return versus net reward in the voluntary provision of a threshold public good: An adversarial collaboration," Public Choice, Springer, vol. 135(3), pages 277-289, June.
    12. Federica Alberti & Edward J. Cartwright & Anna Stepanova, 2012. "Threshold public good games and impulse balance theory," Jena Economics Research Papers 2011-062, Friedrich-Schiller-University Jena.
    13. Philippe Le Coent & Raphaële Préget & Sophie Thoyer, 2014. "Why pay for nothing? An experiment on a conditional subsidy scheme in a threshold public good game," Economics Bulletin, AccessEcon, vol. 34(3), pages 1976-1989.
    14. Bouma, J.A. & Nguyen, Binh & van der Heijden, Eline & Dijk, J.J., 2018. "Analysing Group Contract Design Using a Lab and a Lab-in-the-Field Threshold Public Good Experiment," Discussion Paper 2018-049, Tilburg University, Center for Economic Research.
    15. Rose, Steven K. & Clark, Jeremy & Poe, Gregory L. & Rondeau, Daniel & Schulze, William D., 2002. "The private provision of public goods: tests of a provision point mechanism for funding green power programs," Resource and Energy Economics, Elsevier, vol. 24(1-2), pages 131-155, February.
    16. Rondeau, Daniel & D. Schulze, William & Poe, Gregory L., 1999. "Voluntary revelation of the demand for public goods using a provision point mechanism," Journal of Public Economics, Elsevier, vol. 72(3), pages 455-470, June.
    17. Mohamed Bchir & Marc Willinger, 2013. "Does a membership fee foster successful public good provision? An experimental investigation of the provision of a step-level collective good," Public Choice, Springer, vol. 157(1), pages 25-39, October.
    18. John A. List & David Lucking-Reiley, 2002. "The Effects of Seed Money and Refunds on Charitable Giving: Experimental Evidence from a University Capital Campaign," Journal of Political Economy, University of Chicago Press, vol. 110(1), pages 215-233, February.
    19. Philippe Le Coent & Raphaële Préget & Sophie Thoyer, 2015. "Can collective conditionality improve agri-environmental contracts? Insights from experimental economics," Post-Print hal-01606341, HAL.
    20. Luca Corazzini & Christopher Cotton & Paola Valbonesi, 2013. "Too many charities? Insight from an experiment with multiple public goods and contribution thresholds," Working Papers 2013-13, University of Miami, Department of Economics.

    More about this item

    Keywords

    Public good; Threshold; Refund; Money back guarantee;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecolet:v:134:y:2015:i:c:p:29-33. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ecolet .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.