IDEAS home Printed from https://ideas.repec.org/a/gam/jgames/v10y2019i2p21-d228822.html
   My bibliography  Save this article

Give and Let Give: Alternative Mechanisms Based on Voluntary Contributions

Author

Listed:
  • Philip D. Grech

    (Department of Management, Technology and Economics, ETH Zurich, 8092 Zurich, Switzerland)

Abstract

We propose a new family of mechanisms, whereby players may give more or less directly to one another. A cornerstone case is the regular linear public goods mechanism (LPGM), where all contribute into a single common group account, the total amount of which is then distributed equally among players. We show that with sufficiently (yet not necessarily fully) pro-social preferences, the social optimum can be reached in Nash equilibrium in all social dilemma situations described by our mechanisms (including the LPGM). In addition, for a given heterogeneity of pro-social preferences, we help to identify which specific mechanisms perform best in terms of incentivizing giving. Our results are therefore relevant from two vantage points. One, they provide proper rational choice benchmarks based on Nash equilibrium under the assumption of other-regarding preferences. Two, they provide arguments in favor of re-structuring many collective action problems currently implemented as LPGMs when it is feasible to gain some information concerning who has concern for whom.

Suggested Citation

  • Philip D. Grech, 2019. "Give and Let Give: Alternative Mechanisms Based on Voluntary Contributions," Games, MDPI, vol. 10(2), pages 1-11, May.
    • Handle: RePEc:gam:jgames:v:10:y:2019:i:2:p:21-:d:228822
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2073-4336/10/2/21/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2073-4336/10/2/21/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Groves, Theodore & Ledyard, John O, 1977. "Optimal Allocation of Public Goods: A Solution to the "Free Rider" Problem," Econometrica, Econometric Society, vol. 45(4), pages 783-809, May.
    2. Mark Isaac, R. & McCue, Kenneth F. & Plott, Charles R., 1985. "Public goods provision in an experimental environment," Journal of Public Economics, Elsevier, vol. 26(1), pages 51-74, February.
    3. R. Mark Isaac & James M. Walker, 1988. "Group Size Effects in Public Goods Provision: The Voluntary Contributions Mechanism," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 103(1), pages 179-199.
    4. Helga Fehr-Duda & Ernst Fehr, 2016. "Sustainability: Game human nature," Nature, Nature, vol. 530(7591), pages 413-415, February.
    5. Tatsuyoshi Saijo, 2014. "The instability of the voluntary contribution mechanism," Working Papers SDES-2014-3, Kochi University of Technology, School of Economics and Management, revised Oct 2014.
    6. Ananish Chaudhuri, 2011. "Sustaining cooperation in laboratory public goods experiments: a selective survey of the literature," Experimental Economics, Springer;Economic Science Association, vol. 14(1), pages 47-83, March.
    7. Feng, Jun & Saijo, Tatsuyoshi & Shen, Junyi & Qin, Xiangdong, 2018. "Instability in the voluntary contribution mechanism with a quasi-linear payoff function: An experimental analysis," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 72(C), pages 67-77.
    8. William Nordhaus, 2015. "Climate Clubs: Overcoming Free-Riding in International Climate Policy," American Economic Review, American Economic Association, vol. 105(4), pages 1339-1370, April.
    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. Heinrich H. Nax, 2021. "Social Norm and Risk Attitudes: Introduction to the Special Issue," Games, MDPI, vol. 12(4), pages 1-2, October.
    2. Grech, Philip D. & Nax, Heinrich H., 2020. "Rational altruism? On preference estimation and dictator game experiments," Games and Economic Behavior, Elsevier, vol. 119(C), pages 309-338.

    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. Ledyard, John O., "undated". "Public Goods: A Survey of Experimental Research," Working Papers 861, California Institute of Technology, Division of the Humanities and Social Sciences.
    2. Tjaša Bjedov & Simon Lapointe & Thierry Madiès & Marie Claire Villeval, 2018. "Does decentralization of decisions increase the stability of large groups?," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 51(4), pages 681-716, December.
    3. Jeremy Clark & David L Dickinson, 2020. "The effect of sleep on public good contributions and punishment: Experimental evidence," PLOS ONE, Public Library of Science, vol. 15(10), pages 1-26, October.
    4. Arifovic, Jasmina & Ledyard, John, 2012. "Individual evolutionary learning, other-regarding preferences, and the voluntary contributions mechanism," Journal of Public Economics, Elsevier, vol. 96(9-10), pages 808-823.
    5. Chen, Yan & Plott, Charles R., 1996. "The Groves-Ledyard mechanism: An experimental study of institutional design," Journal of Public Economics, Elsevier, vol. 59(3), pages 335-364, March.
    6. Jeremy Clark & David L. Dickinson, 2017. "The Impact of Sleep Restriction on Contributions and Punishment: First Evidence," Working Papers 17-04, Department of Economics, Appalachian State University.
    7. Nax, Heinrich H. & Murphy, Ryan O. & Helbing, Dirk, 2014. "Stability and welfare of 'merit-based' group-matching mechanisms in voluntary contribution game," LSE Research Online Documents on Economics 65444, London School of Economics and Political Science, LSE Library.
    8. Feng, Jun & Saijo, Tatsuyoshi & Shen, Junyi & Qin, Xiangdong, 2018. "Instability in the voluntary contribution mechanism with a quasi-linear payoff function: An experimental analysis," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 72(C), pages 67-77.
    9. Tatsuyoshi Saijo, 2015. "The sandwich property in the voluntary contribution mechanism:The instability approach," Working Papers SDES-2015-13, Kochi University of Technology, School of Economics and Management, revised Mar 2015.
    10. Bryan C. McCannon, 2018. "Leadership and motivation for public goods contributions," Scottish Journal of Political Economy, Scottish Economic Society, vol. 65(1), pages 68-96, February.
    11. Takeuchi, Ai & Seki, Erika, 2023. "Coordination and free-riding problems in the provision of multiple public goods," Journal of Economic Behavior & Organization, Elsevier, vol. 206(C), pages 95-121.
    12. Reischmann, Andreas, 2015. "The Conditional Contribution Mechanism for the Provision of Public Goods," Working Papers 0586, University of Heidelberg, Department of Economics.
    13. Pietro Battiston & Simona Gamba & Matteo Rizzolli & Valentina Rotondi, 2018. "What exactly is public in a public good game? A lab-in-the-field experiment," Working Papers 125, "Carlo F. Dondena" Centre for Research on Social Dynamics (DONDENA), Università Commerciale Luigi Bocconi.
    14. Nax, Heinrich H. & Burton-Chellew, Maxwell N. & West, Stuart A. & Young, H. Peyton, 2016. "Learning in a black box," Journal of Economic Behavior & Organization, Elsevier, vol. 127(C), pages 1-15.
    15. Chaudhuri, Ananish & Paichayontvijit, Tirnud & Smith, Alexander, 2017. "Belief heterogeneity and contributions decay among conditional cooperators in public goods games," Journal of Economic Psychology, Elsevier, vol. 58(C), pages 15-30.
    16. Haruvy, Ernan & Li, Sherry Xin & McCabe, Kevin & Twieg, Peter, 2017. "Communication and visibility in public goods provision," Games and Economic Behavior, Elsevier, vol. 105(C), pages 276-296.
    17. Nax, Heinrich H. & Burton-Chellew, Maxwell N. & West, Stuart A. & Young, H. Peyton, 2016. "Learning in a black box," LSE Research Online Documents on Economics 68714, London School of Economics and Political Science, LSE Library.
    18. Andreas Löschel & Dirk Rübbelke, 2014. "On the Voluntary Provision of International Public Goods," Economica, London School of Economics and Political Science, vol. 81(322), pages 195-204, April.
    19. Fangfang Tan, 2008. "Punishment in a Linear Public Good Game with Productivity Heterogeneity," De Economist, Springer, vol. 156(3), pages 269-293, September.
    20. Catherine C Eckel & Enrique Fatas & Sara Godoy & Rick K Wilson, 2016. "Group-Level Selection Increases Cooperation in the Public Goods Game," PLOS ONE, Public Library of Science, vol. 11(8), pages 1-13, August.

    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:gam:jgames:v:10:y:2019:i:2:p:21-:d:228822. 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: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    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.