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Assessing A Provision Game For Two Units Of A Public Good, With Different Group Arrangements, Marginal Benefits, And Rebate Rules: Experimental Evidence

Author

Listed:
  • Liu, Pengfei
  • Swallow, Stephen K.
  • Anderson, Christopher M.

Abstract

We design two institutions that collect individual contributions to provide multiple public good units, inspired by a problem to deliver ecosystem services as a step-level public good (delivered in discrete increments). We set up a public good experiment wherein either all individuals for one group and are responsible for providing the two units (aggregated-group approach), or two groups provide one unit separately, but both group benefits if any unit is provided (disaggregated-group approach). Our interest is to test which of these two institutions performs “better” through the collective decision process. Our results show that, in general, the aggregated-group has a higher rate of success delivering at least one unit of the public good, while the disaggregated-group institution generates more revenue. Furthermore, we explore the influence of different rebate rules that redistribute the portion of contributions, that exceeds the provision cost, under both institutions. We find rebate rules significantly raise individual contributions, even though they do not change the set of requirements for Nash equilibria.

Suggested Citation

  • Liu, Pengfei & Swallow, Stephen K. & Anderson, Christopher M., "undated". "Assessing A Provision Game For Two Units Of A Public Good, With Different Group Arrangements, Marginal Benefits, And Rebate Rules: Experimental Evidence," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 123205, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea12:123205
    DOI: 10.22004/ag.econ.123205
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    Cited by:

    1. Swallow, Stephen K. & Anderson, Christopher M. & Uchida, Emi, 2018. "The Bobolink Project: Selling Public Goods From Ecosystem Services Using Provision Point Mechanisms," Ecological Economics, Elsevier, vol. 143(C), pages 236-252.

    More about this item

    Keywords

    Institutional and Behavioral Economics; Public Economics;

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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