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Heterogeneity and the Voluntary Provision of Public Goods

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Author Info
Kenneth Chan
Stuart Mestelman ()
Robert Moir
R. Muller

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Abstract

We investigate the effects of heterogeneity and incomplete information on aggregate contributions to a public good using the voluntary contribution mechanism. The non-linear laboratory environment has three-person groups as partners under varying conditions of information and communication. Bergstrom, Blum and Varian predict that increasing heterogeneity will have no effect on aggregate contributions in a no-communication environment. Ledyard conjectures a positive effect of incomplete information, a negative effect of heterogeneity, and a positive interaction of heterogeneity and incomplete information. We find that incomplete information has a small but significant negative effect. Heterogeneity has a positive effect on aggregate contributions, but its effects interact unexpectedly with communication. In a no-communication environment, heterogeneity in two dimensions (endowment and preferences) increases contributions substantially while heterogeneity in a single dimension (endowment or preferences) has little effect. In the communication environment we find the reverse. We also find a positive interaction between heterogeneity and incomplete information. Thus we reject the Bergstrom, Blume and Varian invariance result and provide mixed evidence on Ledyard's conjectures. Copyright Kluwer Academic Publishers 1999

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File URL: http://hdl.handle.net/10.1023/A:1009984414401
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Publisher Info
Article provided by Springer in its journal Experimental Economics.

Volume (Year): 2 (1999)
Issue (Month): 1 (August)
Pages: 5-30
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Handle: RePEc:kap:expeco:v:2:y:1999:i:1:p:5-30

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Related research
Keywords: public goods; voluntary provision; heterogeneous agents;

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Kenneth S. Chan & Stuart Mestelman & R. Andrew Muller, 1998. "Voluntary Provision of Public Goods," McMaster Experimental Economics Laboratory Publications 1998-02, McMaster University. [Downloadable!]
    Other versions:
  2. Chan, Kenneth S. & Godby, Rob & Mestelman, Stuart & Muller, R. Andrew, 1997. "Equity theory and the voluntary provision of public goods," Journal of Economic Behavior & Organization, Elsevier, vol. 32(3), pages 349-364, March. [Downloadable!] (restricted)
  3. Hackett Steven & Schlager Edella & Walker James, 1994. "The Role of Communication in Resolving Commons Dilemmas: Experimental Evidence with Heterogeneous Appropriators," Journal of Environmental Economics and Management, Elsevier, vol. 27(2), pages 99-126, September. [Downloadable!] (restricted)
  4. Kenneth S. Chan & Rob Godby & Stuart Mestelman & R. Andrew Muller, 1998. "Crowding Out Voluntary Contributions to Public Goods," Department of Economics Working Papers 1998-03, McMaster University. [Downloadable!]
    Other versions:
  5. Bagnoli, Mark & McKee, Michael, 1991. "Voluntary Contribution Games: Efficient Private Provision of Public Goods," Economic Inquiry, Oxford University Press, vol. 29(2), pages 351-66, April.
  6. Isaac, R Mark & Walker, James M, 1988. "Communication and Free-Riding Behavior: The Voluntary Contribution Mechanism," Economic Inquiry, Oxford University Press, vol. 26(4), pages 585-608, October.
  7. Kenneth S, et al Chan, 1996. "The Voluntary Provision of Public Goods under Varying Income Distributions," Canadian Journal of Economics, Canadian Economics Association, vol. 29(1), pages 54-69, February. [Downloadable!] (restricted)
  8. Robert Moir, 1998. "A Monte Carlo Analysis of the Fisher Randomization Technique: Reviving Randomization for Experimental Economists," Experimental Economics, Springer, vol. 1(1), pages 87-100, June. [Downloadable!] (restricted)
  9. Kanbur, Ravi, 1992. "Heterogeneity, distribution, and cooperation in common property resource management," Policy Research Working Paper Series 844, The World Bank. [Downloadable!]
  10. Rapoport, Amnon & Suleiman, Ramzi, 1993. "Incremental Contribution in Step-Level Public Goods Games with Asymmetric Players," Organizational Behavior and Human Decision Processes, Elsevier, vol. 55(2), pages 171-194, July. [Downloadable!] (restricted)
  11. Andrew Muller & Michelle Vickers, 1996. "Communication in a Common Pool Resource Environment with Probabilistic Destruction," Department of Economics Working Papers 1996-02, McMaster University. [Downloadable!]
  12. Andreoni, James, 1993. "An Experimental Test of the Public-Goods Crowding-Out Hypothesis," American Economic Review, American Economic Association, vol. 83(5), pages 1317-27, December. [Downloadable!] (restricted)
  13. Bergstrom, Theodore & Blume, Lawrence & Varian, Hal, 1986. "On the private provision of public goods," Journal of Public Economics, Elsevier, vol. 29(1), pages 25-49, February. [Downloadable!] (restricted)
    Other versions:
  14. Bardhan, Pranab, 1993. "Symposium on Management of Local Commons," Journal of Economic Perspectives, American Economic Association, vol. 7(4), pages 87-92, Fall. [Downloadable!] (restricted)
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Stephen Schott & Neil Buckley & Stuart Mestelman & R. Andrew Muller, 2002. "Output Sharing Among Groups Exploiting Common Pool Resources," Department of Economics Working Papers 2002-06, McMaster University. [Downloadable!]
    Other versions:
  2. Louis Lévy-Garboua & Claude Montmarquette & Marie-Claire Villeval, 2007. "Individual Responsibility and the Funding of Collective Goods," IZA Discussion Papers 3041, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  3. Sadrieh, A. & Verbon, H.A.A., 2002. "Inequality, trust, and growth: : an experimental study," Discussion Paper 84, Tilburg University, Center for Economic Research. [Downloadable!]
  4. Massimo Finocchiaro Castro, 2005. "Behaviour in a Two-Stage Two Public Goods Experiment," Experimental 0504002, EconWPA. [Downloadable!]
  5. Fangfang Tan, 2008. "Punishment in a Linear Public Good Game with Productivity Heterogeneity," De Economist, Springer, vol. 156(3), pages 269-293, September. [Downloadable!] (restricted)
  6. Gueth, W. & Sutter, M. & Verbon, H. & Weck-Hannemann, H., 2001. "Family versus public solidarity : theory and experiment," Discussion Paper 86, Tilburg University, Center for Economic Research. [Downloadable!]
  7. Lisa R. Anderson & Jennifer M. Mellor & Jeffrey Milyo, 2003. "Inequality, Group Cohesion, and Public Good Provision: An Experimental Analysis," Working Papers 0308, Harris School of Public Policy Studies, University of Chicago. [Downloadable!]
    Other versions:
  8. K. S. Chan & S. Mestelman & R. Moir & R. A. Muller, 2001. "Heterogeneity, Communication, Coordination and Voluntary Provision of a Public Good," Department of Economics Working Papers 2001-06, McMaster University. [Downloadable!]
    Other versions:
  9. Visser, Martine & Burns, Justine, 2006. "Bridging the Great Divide in South Africa: Inequality and Punishment in the Provision of Public Goods," Working Papers in Economics 219, Göteborg University, Department of Economics. [Downloadable!]
  10. Neil Buckley & Stuart Mestelman & R. Andrew Muller & Stephan Schott & Jingjing Zhang, 2009. "Shut Up and Fish: The Role of Communication when Output-Sharing is used to Manage a Common Pool Resource," Department of Economics Working Papers 2009-15, McMaster University. [Downloadable!]
  11. John Spraggon, 2003. "Exogenous Targeting Instruments with Heterogeneous Agents," McMaster Experimental Economics Laboratory Publications 2003-02, McMaster University. [Downloadable!]
  12. Hichri, Pavel & Hichri, Walid, 2008. "An auction mechanism for public goods provision: an experimental study," MPRA Paper 7884, University Library of Munich, Germany, revised 2008. [Downloadable!]
  13. Juan Camilo Cardenas & John K. Stranlund & Cleve E. Willis, 2002. "Economic inequality and burden-sharing in the provision of local environmental quality," Artefactual Field Experiments 0026, The Field Experiments Website. [Downloadable!]
    Other versions:
  14. Lisa Anderson & Jennifer Mellor & Jeffrey Milyo, 2006. "Induced heterogeneity in trust experiments," Experimental Economics, Springer, vol. 9(3), pages 223-235, September. [Downloadable!] (restricted)
  15. Massimo Finocchiaro Castro, 2005. "Behaviour in a Two-Stage Public Goods Experiment," Royal Holloway, University of London: Discussion Papers in Economics 05/05, Department of Economics, Royal Holloway University of London, revised May 2005. [Downloadable!]
  16. Reuben, Ernesto & Riedl, Arno, 2009. "Enforcement of Contribution Norms in Public Good Games with Heterogeneous Populations," IZA Discussion Papers 4303, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
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