IDEAS home Printed from https://ideas.repec.org/a/kap/enreec/v61y2015i3p365-383.html
   My bibliography  Save this article

On the Provision of Public Goods with Probabilistic and Ambiguous Thresholds

Author

Listed:
  • Astrid Dannenberg
  • Andreas Löschel
  • Gabriele Paolacci
  • Christiane Reif
  • Alessandro Tavoni

Abstract

Many natural systems involve thresholds that, once triggered, imply irreversible damages for the users. Although the existence of such thresholds is undisputed, their location is highly uncertain. We explore experimentally how threshold uncertainty affects collective action in a series of threshold public goods games. Whereas the public good is always provided when the exact value of the threshold is known, threshold uncertainty is generally detrimental for the public good provision as contributions become more erratic. The negative effect of threshold uncertainty is particularly severe when it takes the form of ambiguity, i.e. when players are not only unaware of the value of the threshold, but also of its probability distribution. Early and credible commitment helps groups to cope with uncertainty. Copyright Springer Science+Business Media Dordrecht 2015

Suggested Citation

  • Astrid Dannenberg & Andreas Löschel & Gabriele Paolacci & Christiane Reif & Alessandro Tavoni, 2015. "On the Provision of Public Goods with Probabilistic and Ambiguous Thresholds," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 61(3), pages 365-383, July.
    • Handle: RePEc:kap:enreec:v:61:y:2015:i:3:p:365-383
    DOI: 10.1007/s10640-014-9796-6
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s10640-014-9796-6
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s10640-014-9796-6?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. Palfrey, Thomas R. & Rosenthal, Howard, 1984. "Participation and the provision of discrete public goods: a strategic analysis," Journal of Public Economics, Elsevier, vol. 24(2), pages 171-193, July.
    2. Fischbacher, Urs & Gachter, Simon & Fehr, Ernst, 2001. "Are people conditionally cooperative? Evidence from a public goods experiment," Economics Letters, Elsevier, vol. 71(3), pages 397-404, June.
    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. Steven J. Lade & Alessandro Tavoni & Simon A. Levin & Maja Schl�ter, 2013. "Regime shifts in a social-ecological system," GRI Working Papers 105, Grantham Research Institute on Climate Change and the Environment.
    6. John D. Hey & Gianna Lotito & Anna Maffioletti, 2018. "The descriptive and predictive adequacy of theories of decision making under uncertainty/ambiguity," World Scientific Book Chapters, in: Experiments in Economics Decision Making and Markets, chapter 8, pages 189-219, World Scientific Publishing Co. Pte. Ltd..
    7. Camerer, Colin & Weber, Martin, 1992. "Recent Developments in Modeling Preferences: Uncertainty and Ambiguity," Journal of Risk and Uncertainty, Springer, vol. 5(4), pages 325-370, October.
    8. Olof Johansson-Stenman & James Konow, 2010. "Fair Air: Distributive Justice and Environmental Economics," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 46(2), pages 147-166, June.
    9. Alessandro Tavoni & Astrid Dannenberg & Giorgos Kallis & Andreas L�schel, 2011. "Inequality, communication and the avoidance of disastrous climate change," GRI Working Papers 34, Grantham Research Institute on Climate Change and the Environment.
    10. Lata Gangadharan & Veronika Nemes, 2009. "Experimental Analysis Of Risk And Uncertainty In Provisioning Private And Public Goods," Economic Inquiry, Western Economic Association International, vol. 47(1), pages 146-164, January.
    11. 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.
    12. M. Levati & Andrea Morone & Annamaria Fiore, 2009. "Voluntary contributions with imperfect information: An experimental study," Public Choice, Springer, vol. 138(1), pages 199-216, January.
    13. Hasson, Reviva & Löfgren, Åsa & Visser, Martine, 2010. "Climate change in a public goods game: Investment decision in mitigation versus adaptation," Ecological Economics, Elsevier, vol. 70(2), pages 331-338, December.
    14. Scott Barrett & Astrid Dannenberg, 2014. "Sensitivity of collective action to uncertainty about climate tipping points," Nature Climate Change, Nature, vol. 4(1), pages 36-39, January.
    15. McBride, Michael, 2006. "Discrete public goods under threshold uncertainty," Journal of Public Economics, Elsevier, vol. 90(6-7), pages 1181-1199, August.
    16. Andrea Morone & Ozlem Ozdemir, 2012. "Displaying Uncertain Information About Probability: Experimental Evidence," Bulletin of Economic Research, Wiley Blackwell, vol. 64(2), pages 157-171, April.
    17. Chen, Xiao-ping & Komorita, S. S., 1994. "The Effects of Communication and Commitment in a Public Goods Social Dilemma," Organizational Behavior and Human Decision Processes, Elsevier, vol. 60(3), pages 367-386, December.
    18. Carmela Di Mauro & Anna Maffioletti, 2004. "Attitudes to risk and attitudes to uncertainty: experimental evidence," Applied Economics, Taylor & Francis Journals, vol. 36(4), pages 357-372.
    19. Scott Barrett & Astrid Dannenberg, 2014. "On the Sensitivity of Collective Action to Uncertainty about Climate Tipping Points," CESifo Working Paper Series 4643, CESifo.
    20. Lasse Ringius & Asbjørn Torvanger & Arild Underdal, 2002. "Burden Sharing and Fairness Principles in International Climate Policy," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 2(1), pages 1-22, March.
    21. Ramzi Suleiman & David V. Budescu & Amnon Rapoport, 2001. "Provision of Step-Level Public Goods with Uncertain Provision Threshold and Continuous Contribution," Group Decision and Negotiation, Springer, vol. 10(3), pages 253-274, May.
    22. Alpizar, Francisco & Carlsson, Fredrik & Naranjo, Maria A., 2011. "The effect of ambiguous risk, and coordination on farmers' adaptation to climate change — A framed field experiment," Ecological Economics, Elsevier, vol. 70(12), pages 2317-2326.
    23. M. Vittoria Levati & Andrea Morone, 2013. "Voluntary Contributions with Risky and Uncertain Marginal Returns: The Importance of the Parameter Values," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 15(5), pages 736-744, October.
    24. Daniel Balliet, 2010. "Communication and Cooperation in Social Dilemmas: A Meta-Analytic Review," Journal of Conflict Resolution, Peace Science Society (International), vol. 54(1), pages 39-57, February.
    25. Elinor Ostrom, 2000. "Collective Action and the Evolution of Social Norms," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 137-158, Summer.
    26. Daniel Ellsberg, 1961. "Risk, Ambiguity, and the Savage Axioms," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 75(4), pages 643-669.
    27. Barrett, Scott, 2013. "Climate treaties and approaching catastrophes," Journal of Environmental Economics and Management, Elsevier, vol. 66(2), pages 235-250.
    28. Ramzi Suleiman, 1997. "Provision Of Step-Level Public Goods Under Uncertainty," Rationality and Society, , vol. 9(2), pages 163-187, May.
    29. Michael McBride, 2010. "Threshold uncertainty in discrete public good games: an experimental study," Economics of Governance, Springer, vol. 11(1), pages 77-99, February.
    30. Yosef Bhatti & Kasper Lindskow & Lene Holm Pedersen, 2010. "Burden-sharing and global climate negotiations: the case of the Kyoto Protocol," Climate Policy, Taylor & Francis Journals, vol. 10(2), pages 131-147, March.
    31. Clare Chua Chow & Rakesh Sarin, 2002. "Known, Unknown, and Unknowable Uncertainties," Theory and Decision, Springer, vol. 52(2), pages 127-138, March.
    32. Reviva Hasson & Åsa Löfgren & Martine Visser, 2012. "Treatment Effects Of Climate Change Risk On Mitigation And Adaptation Behaviour In An Experimental Setting," South African Journal of Economics, Economic Society of South Africa, vol. 80(3), pages 415-430, September.
    33. Nitzan, Shmuel & Romano, Richard E., 1990. "Private provision of a discrete public good with uncertain cost," Journal of Public Economics, Elsevier, vol. 42(3), pages 357-370, August.
    Full references (including those not matched with items on IDEAS)

    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. Astrid Dannenberg & Andreas L�schel & Gabriele Paolacci & Christiane Reif & Alessandro Tavoni, 2011. "Coordination under threshold uncertainty in a public goods game," GRI Working Papers 64, Grantham Research Institute on Climate Change and the Environment.
    2. Guilfoos, Todd & Miao, Haoran & Trandafir, Simona & Uchida, Emi, 2019. "Social learning and communication with threshold uncertainty," Resource and Energy Economics, Elsevier, vol. 55(C), pages 81-101.
    3. Christian Feige & Karl-Martin Ehrhart & Jan Krämer, 2018. "Climate Negotiations in the Lab: A Threshold Public Goods Game with Heterogeneous Contributions Costs and Non-binding Voting," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 70(2), pages 343-362, June.
    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. Blanco, Esther & Dutcher, E. Glenn & Haller, Tobias, 2020. "Social dilemmas with public and private insurance against losses," Journal of Economic Behavior & Organization, Elsevier, vol. 180(C), pages 924-937.
    6. Schuch, Esther & Dirks, Simone & Nhim, Tum & Richter, Andries, 2021. "Cooperation under social and strategic uncertainty – The role of risk and social capital in rural Cambodia," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 90(C).
    7. Lisa Bruttel & Werner Güth & Juri Nithammer & Andreas Orland, 2022. "Inefficient Cooperation Under Stochastic and Strategic Uncertainty," Journal of Conflict Resolution, Peace Science Society (International), vol. 66(4-5), pages 755-782, May.
    8. Anauati, María Victoria & Feld, Brian & Galiani, Sebastian & Torrens, Gustavo, 2016. "Collective action: Experimental evidence," Games and Economic Behavior, Elsevier, vol. 99(C), pages 36-55.
    9. Ahsanuzzaman, & Palm-Forster, Leah H. & Suter, Jordan F., 2022. "Experimental evidence of common pool resource use in the presence of uncertainty," Journal of Economic Behavior & Organization, Elsevier, vol. 194(C), pages 139-160.
    10. Zhi Li & Dongsheng Chen & Pengfei Liu, 2023. "Assurance payments on the coordination of threshold public goods provision: An experimental investigation," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 25(2), pages 407-436, April.
    11. Koji Kotani & Kenta Tanaka & Shunsuke Managi, 2014. "Cooperative choice and its framing effect under threshold uncertainty in a provision point mechanism," Economics of Governance, Springer, vol. 15(4), pages 329-353, November.
    12. Douadia Bougherara & Laurent Denant-Boèmont & David Masclet, 2007. "Creating vs. maintaining threshold public goods in conservation policies," Post-Print halshs-00175879, HAL.
    13. David M. McEvoy & Tobias Haller & Esther Blanco, 2022. "The Role of Non-Binding Pledges in Social Dilemmas with Mitigation and Adaptation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 81(4), pages 685-710, April.
    14. Aseem Mahajan & Reuben Kline & Dustin Tingley, 2022. "Collective Risk and Distributional Equity in Climate Change Bargaining," Journal of Conflict Resolution, Peace Science Society (International), vol. 66(1), pages 61-90, January.
    15. Feige, Christian & Ehrhart, Karl-Martin & Krämer, Jan, 2014. "Voting on contributions to a threshold public goods game: An experimental investigation," Working Paper Series in Economics 60, Karlsruhe Institute of Technology (KIT), Department of Economics and Management.
    16. Billur Aksoy & Silvana Krasteva, 2020. "When does less information translate into more giving to public goods?," Experimental Economics, Springer;Economic Science Association, vol. 23(4), pages 1148-1177, December.
    17. Brekke, Kjell Arne & Konow, James & Nyborg, Karine, 2017. "Framing in a threshold public goods experiment with heterogeneous endowments," Journal of Economic Behavior & Organization, Elsevier, vol. 138(C), pages 99-110.
    18. Doruk İriş & Jungmin Lee & Alessandro Tavoni, 2015. "Delegation and public pressure in a threshold public goods game: theory and experimental evidence," GRI Working Papers 186, Grantham Research Institute on Climate Change and the Environment.
    19. Scott Barrett & Astrid Dannenberg, 2014. "Negotiating to Avoid "Gradual" versus "Dangerous" Climate Change: An Experimental Test of Two Prisoners' Dilemma," CESifo Working Paper Series 4573, CESifo.
    20. McBride, Michael, 2006. "Discrete public goods under threshold uncertainty," Journal of Public Economics, Elsevier, vol. 90(6-7), pages 1181-1199, August.

    More about this item

    Keywords

    Cooperation; Experiment; Public good; Threshold uncertainty; Ambiguity; C72; C92; H41; Q54;
    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
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

    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:kap:enreec:v:61:y:2015:i:3:p:365-383. 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.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.