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Context and Voluntary Contributions: An Experimental Analysis of Communication, Voting, and Status Quo Bias

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  • Messer, Kent D.
  • Kaiser, Harry M.
  • Schulze, William D.

Abstract

This research examines the effect of three factors—cheap talk, voting, and the status quo of the donation—on the voluntary contribution mechanism (VCM). Using undergraduate business students, results show that contributions as a percent of income in the last of ten rounds range from 18% for the case of no cheap talk, no voting, and a status quo of not giving to 94% in the case where all three contexts are combined. These results demonstrate the surprising result that context can make the simple VCM produce sustained efficiencies similar to incentive compatible public-good mechanisms.

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File URL: http://purl.umn.edu/127076
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Bibliographic Info

Paper provided by Cornell University, Department of Applied Economics and Management in its series Working Papers with number 127076.

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Date of creation: 2005
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Handle: RePEc:ags:cudawp:127076

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Related research

Keywords: Institutional and Behavioral Economics;

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  1. Rose, Steven K. & Poe, Gregory L. & Rondeau, Daniel & Schulze, William D. & Clark, Jeremy, 1997. "The Private Provision of Public Goods: Tests of a Provision Point Mechanism for Funding Green Power Programs," Working Papers 127850, Cornell University, Department of Applied Economics and Management.
  2. Ferraro, Paul J. & Rondeau, Daniel & Poe, Gregory L., 2003. "Detecting other-regarding behavior with virtual players," Journal of Economic Behavior & Organization, Elsevier, vol. 51(1), pages 99-109, May.
  3. R. Isaac & James Walker & Susan Thomas, 1984. "Divergent evidence on free riding: An experimental examination of possible explanations," Public Choice, Springer, vol. 43(2), pages 113-149, January.
  4. David Masclet & Charles Noussair & Steven Tucker & Marie-Claire Villeval, 2003. "Monetary and non Monetary Punishment in the Voluntary Contributions Mechanism," Post-Print halshs-00175251, HAL.
  5. Bram Cadsby, Charles & Maynes, Elizabeth, 1998. "Choosing between a socially efficient and free-riding equilibrium: Nurses versus economics and business students," Journal of Economic Behavior & Organization, Elsevier, vol. 37(2), pages 183-192, October.
  6. Rondeau, Daniel & Poe, Gregory L. & Schulze, William D., 2005. "VCM or PPM? A comparison of the performance of two voluntary public goods mechanisms," Journal of Public Economics, Elsevier, vol. 89(8), pages 1581-1592, August.
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