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Voluntary Association in Public Goods Experiments: Reciprocity, Mimicry and Efficiency

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We find that a process of voluntary association where individuals express a preference about whom they want to be associated with can create strong incentives to increase efficiency and contributions in provision of a public good. This process of endogenous group formation perfectly sorted contributions by the order of group formation. Comparison of middle and last period behaviour suggests that a majority of the subject population are conditional cooperators, with a minority of monetary payoff maximisers. The experiment illustrates that under favourable conditions, where the opportunities of entry and exit are symmetrically balanced, a process of voluntary association can mitigate the free-rider problem. Copyright 2005 Royal Economic Society.

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Paper provided by Brown University, Department of Economics in its series Working Papers with number 2002-19.

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Date of creation: 2002
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Handle: RePEc:bro:econwp:2002-19

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Postal: Department of Economics, Brown University, Providence, RI 02912

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  1. Andereoni, J., 1988. "Why Free Ride? Strategies And Learning In Public Goods Experiments," Working papers, Wisconsin Madison - Social Systems 375, Wisconsin Madison - Social Systems.
  2. Ben-Ner, Avner & Putterman, Louis, 2000. "On some implications of evolutionary psychology for the study of preferences and institutions," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 43(1), pages 91-99, September.
  3. Ernst Fehr & Simon Gaechter, 2000. "Fairness and Retaliation: The Economics of Reciprocity," CESifo Working Paper Series 336, CESifo Group Munich.
  4. David Kreps & Paul Milgrom & John Roberts & Bob Wilson, 2010. "Rational Cooperation in the Finitely Repeated Prisoners' Dilemma," Levine's Working Paper Archive 239, David K. Levine.
  5. Andreoni, James A & Miller, John H, 1993. "Rational Cooperation in the Finitely Repeated Prisoner's Dilemma: Experimental Evidence," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 103(418), pages 570-85, May.
  6. R. M. Isaac & J. M. Walker, 2010. "Group size effects in public goods provision: The voluntary contribution mechanism," Levine's Working Paper Archive 310, David K. Levine.
  7. Armin Falk & Ernst Fehr & Urs Fischbacher, . "Driving Forces of Informal Sanctions," IEW - Working Papers, Institute for Empirical Research in Economics - University of Zurich 059, Institute for Empirical Research in Economics - University of Zurich.
  8. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 64, pages 416.
  9. Ernst Fehr & Simon Gachter & Georg Kirchsteiger, 1997. "Reciprocity as a Contract Enforcement Device: Experimental Evidence," Econometrica, Econometric Society, Econometric Society, vol. 65(4), pages 833-860, July.
  10. Berg Joyce & Dickhaut John & McCabe Kevin, 1995. "Trust, Reciprocity, and Social History," Games and Economic Behavior, Elsevier, Elsevier, vol. 10(1), pages 122-142, July.
  11. Henrich, Joseph, 2004. "Cultural group selection, coevolutionary processes and large-scale cooperation," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 53(1), pages 3-35, January.
  12. Croson, Rachel T. A., 1996. "Partners and strangers revisited," Economics Letters, Elsevier, Elsevier, vol. 53(1), pages 25-32, October.
  13. Andreoni, James, 1988. "Why free ride? : Strategies and learning in public goods experiments," Journal of Public Economics, Elsevier, Elsevier, vol. 37(3), pages 291-304, December.
  14. Martin Sefton & Robert Shupp & James M. Walker, 2007. "The Effect Of Rewards And Sanctions In Provision Of Public Goods," Economic Inquiry, Western Economic Association International, Western Economic Association International, vol. 45(4), pages 671-690, October.
  15. Hoffman, Elizabeth & McCabe, Kevin A & Smith, Vernon L, 1998. "Behavioral Foundations of Reciprocity: Experimental Economics and Evolutionary Psychology," Economic Inquiry, Western Economic Association International, Western Economic Association International, vol. 36(3), pages 335-52, July.
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