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

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Author Info
David M. McEvoy

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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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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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Find related papers by JEL classification:
H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General

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  1. Oran R. Young, 2003. "Environment and Statecraft: The Strategy of Environmental Treaty-Making," Global Environmental Politics, MIT Press, vol. 3(1), pages 145-147, 02. [Downloadable!] (restricted)
  2. Marks, Melanie & Croson, Rachel, 1998. "Alternative rebate rules in the provision of a threshold public good: An experimental investigation," Journal of Public Economics, Elsevier, vol. 67(2), pages 195-220, February. [Downloadable!] (restricted)
  3. Alistair Ulph, 2004. "Stable International Environmental Agreements with a Stock Pollutant, Uncertainty and Learning," Journal of Risk and Uncertainty, Springer, vol. 29(1), pages 53-73, 07. [Downloadable!]
  4. David Cooper & Carol Stockman, 2002. "Learning to Punish: Experimental Evidence from a Sequential Step-Level Public Goods Game," Experimental Economics, Springer, vol. 5(1), pages 39-51, June. [Downloadable!] (restricted)
  5. Rondeau, Daniel & D. Schulze, William & Poe, Gregory L., 1999. "Voluntary revelation of the demand for public goods using a provision point mechanism," Journal of Public Economics, Elsevier, vol. 72(3), pages 455-470, June. [Downloadable!] (restricted)
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  6. Cadsby, Charles Bram & Maynes, Elizabeth, 1999. "Voluntary provision of threshold public goods with continuous contributions: experimental evidence," Journal of Public Economics, Elsevier, vol. 71(1), pages 53-73, January. [Downloadable!] (restricted)
  7. Kolstad, Charles D., 2007. "Systematic uncertainty in self-enforcing international environmental agreements," Journal of Environmental Economics and Management, Elsevier, vol. 53(1), pages 68-79, January. [Downloadable!] (restricted)
  8. 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. [Downloadable!] (restricted)
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  9. Rapoport, Amnon & Eshed-Levy, Dalit, 1989. "Provision of step-level public goods: Effects of greed and fear of being gypped," Organizational Behavior and Human Decision Processes, Elsevier, vol. 44(3), pages 325-344, December. [Downloadable!] (restricted)
  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. Asch, Peter & Gigliotti, Gary A & Polito, James A, 1993. " Free Riding with Discrete and Continuous Public Goods: Some Experimental Evidence," Public Choice, Springer, vol. 77(2), pages 293-305, October.
  12. 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.
  13. Charles Cadsby & Rachel Croson & Melanie Marks & Elizabeth Maynes, 2008. "Step return versus net reward in the voluntary provision of a threshold public good: An adversarial collaboration," Public Choice, Springer, vol. 135(3), pages 277-289, June. [Downloadable!] (restricted)
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