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Donations as an incentive for cooperation in public good games

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  • Butz, Britta
  • Harbring, Christine

Abstract

Identifying mechanisms to enhance cooperation in social dilemma games is one of the major challenges in the field of economics. It is typical in repeated public good games that participants cooperate to a certain degree on average and that cooperation declines over rounds. Evidence from other settings suggests that the use of charitable donations enhances prosocial behavior. In this project, we investigate whether donations can serve as incentives for a higher level of cooperation in public good games. For this purpose, we include a twenty percent donation share which is dependent on participants’ contributions. Donations are either financed internally (by group members’ contributions) or externally (by the experimenter). We observe that a donation incentive increases contributions significantly when donations are subsidized by the experimenter. Interestingly, donations that are internally and directly financed by group members may compensate for a lower marginal return from the public good.

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  • Butz, Britta & Harbring, Christine, 2020. "Donations as an incentive for cooperation in public good games," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 85(C).
    • Handle: RePEc:eee:soceco:v:85:y:2020:i:c:s221480431930206x
    DOI: 10.1016/j.socec.2019.101510
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    Cited by:

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    More about this item

    Keywords

    Donations; Public good game; Team incentives; Experiment;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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