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Not It: Opting out of Voluntary Coalitions that Provide a Public Good

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  • David M. McEvoy

Abstract

Most coalitions that form to increase contributions to a public good do not require full participation by all users of the public good, and therefore create incentives for free riding. If given the opportunity to opt out of a voluntary coalition, in theory, agents should try to be among the first to do so, forcing the remaining undecided agents to bear the cost of participating in the coalition. This study tests the predicted sequence of participation decisions in voluntary coalitions using real-time threshold public goods experiments. We find that subjects’ behavior is more consistent with the theoretical predictions when the difference in payoffs between coalition members and free-riding non-members is relatively large. Key Words: voluntary coalitions, voluntary agreements, public goods experiments, free riding

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File URL: http://econ.appstate.edu/RePEc/pdf/wp0914.pdf
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Paper provided by Department of Economics, Appalachian State University in its series Working Papers with number 09-14.

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Date of creation: 2009
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Handle: RePEc:apl:wpaper:09-14

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Web page: http://www.business.appstate.edu/departments/economics/
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Cited by:
  1. David M. McEvoy & James J. Murphy & John M. Spraggon & John K. Stranlund, 2008. "The Problem of Maintaining Compliance within Stable Coalitions: Experimental Evidence," Working Papers 08-10, Department of Economics, Appalachian State University.
  2. Federica Alberti & Edward J. Cartwright, 2011. "Full agreement and the provision of threshold public goods," Jena Economic Research Papers 2011-063, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  3. Leo Wangler & JJuan-Carlos Altamirano-Cabrera & Hans-Peter Weikard, 2011. "The Political Economy of International Environmental Agreements: A Survey," Jena Economic Research Papers 2011-038, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  4. Bolle, Friedel, 2014. "On a class of threshold public goods games: With applications to voting and the Kyoto Protocol," Discussion Papers 345, European University Viadrina Frankfurt (Oder), Department of Business Administration and Economics.
  5. David McEvoy & Michael Jones & Michael McKee & John Talberth, 2013. "Incentivizing Cooperative Agreements for Sustainable Forest Management: Experimental Tests of Alternative Structures and Institutional Rules," Working Papers 13-23, Department of Economics, Appalachian State University.
  6. Todd Cherry & David McEvoy, 2013. "Enforcing Compliance with Environmental Agreements in the Absence of Strong Institutions: An Experimental Analysis," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 54(1), pages 63-77, January.

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