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Playing with the Good Guys - A Public Good Game with Endogenous Group Formation

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  • Kjell Arne Brekke
  • Karen Evelyn Hauge
  • Jo Thori Lind
  • Karine Nyborg

Abstract

In public good games, voluntary contributions tend to start off high and decline as the game is repeated. If high contributors are matched, however, contributions tend to stay high. We propose a formalization predicting that high contributors will self-select into groups committed to charitable giving. Testing this experimentally, we let subjects choose between two group types, where one type donate a fixed amount to a charity. Contributions in these groups stayed high, whereas contributions in the other groups showed the well known declining pattern. One implication is that corporate social responsibility may attract more responsible employees.

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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 2647.

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Date of creation: 2009
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Handle: RePEc:ces:ceswps:_2647

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Keywords: altruism; conditional; cooperation; self-selection;

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References

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  1. Urs Fischbacher & Simon Gaechter, 2006. "Heterogeneous social preferences and the dynamics of free riding in public goods," Discussion Papers, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham 2006-01, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
  2. Andreoni, James, 1990. "Impure Altruism and Donations to Public Goods: A Theory of Warm-Glow Giving?," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 100(401), pages 464-77, June.
  3. T. K. Ahn & R. Mark Isaac & Timothy C. Salmon, 2008. "Endogenous Group Formation," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 10(2), pages 171-194, 04.
  4. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer, Springer, vol. 10(2), pages 171-178, June.
  5. Fischbacher, Urs & Gachter, Simon & Fehr, Ernst, 2001. "Are people conditionally cooperative? Evidence from a public goods experiment," Economics Letters, Elsevier, Elsevier, vol. 71(3), pages 397-404, June.
  6. Simon Gachter & Ernst Fehr, 2000. "Cooperation and Punishment in Public Goods Experiments," American Economic Review, American Economic Association, American Economic Association, vol. 90(4), pages 980-994, September.
  7. Brekke, Kjell Arne & Kverndokk, Snorre & Nyborg, Karine, 2003. "An economic model of moral motivation," Journal of Public Economics, Elsevier, Elsevier, vol. 87(9-10), pages 1967-1983, September.
  8. Keser, Claudia & van Winden, Frans, 2000. " Conditional Cooperation and Voluntary Contributions to Public Goods," Scandinavian Journal of Economics, Wiley Blackwell, Wiley Blackwell, vol. 102(1), pages 23-39, March.
  9. Croson, Rachel T. A., 1996. "Partners and strangers revisited," Economics Letters, Elsevier, Elsevier, vol. 53(1), pages 25-32, October.
  10. Blanco, Mariana & Engelmann, Dirk & Normann, Hans Theo, 2011. "A within-subject analysis of other-regarding preferences," Games and Economic Behavior, Elsevier, Elsevier, vol. 72(2), pages 321-338, June.
  11. Altmann, Steffen & Dohmen, Thomas & Wibral, Matthias, 2008. "Do the reciprocal trust less?," Economics Letters, Elsevier, Elsevier, vol. 99(3), pages 454-457, June.
  12. Talbot Page & Louis Putterman & Bulent Unel, 2005. "Voluntary Association in Public Goods Experiments: Reciprocity, Mimicry and Efficiency," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 115(506), pages 1032-1053, October.
  13. Ones, Umut & Putterman, Louis, 2007. "The ecology of collective action: A public goods and sanctions experiment with controlled group formation," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 62(4), pages 495-521, April.
  14. Tibor Neugebauer & Javier Perote & Ulrich Schmidt & Malte Loos, 2005. "Selfish-biased conditional cooperation: On the decline of contributions in repeated public goods experiments," Experimental, EconWPA 0503009, EconWPA.
  15. Gunnthorsdottir, Anna & Houser, Daniel & McCabe, Kevin, 2007. "Disposition, history and contributions in public goods experiments," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 62(2), pages 304-315, February.
  16. Andreoni, James, 1988. "Privately provided public goods in a large economy: The limits of altruism," Journal of Public Economics, Elsevier, Elsevier, vol. 35(1), pages 57-73, February.
  17. Brekke, Kjell Arne & Nyborg, Karine, 2008. "Attracting responsible employees: Green production as labor market screening," Resource and Energy Economics, Elsevier, Elsevier, vol. 30(4), pages 509-526, December.
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Citations

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Cited by:
  1. Jacobsen, Karin J. & Eika, Kari H. & Helland, Leif & Lind, Jo Thori & Nyborg, Karine, 2011. "Are nurses more altruistic than real estate brokers?," Journal of Economic Psychology, Elsevier, Elsevier, vol. 32(5), pages 818-831.
  2. John Duffy & Jonathan Lafky, 2014. "Birth, Death and Public Good Provision," Working Papers, University of Pittsburgh, Department of Economics 520, University of Pittsburgh, Department of Economics, revised Jan 2014.
  3. Fehrler, Sebastian & Kosfeld, Michael, 2013. "Can You Trust the Good Guys? Trust Within and Between Groups with Different Missions," IZA Discussion Papers 7411, Institute for the Study of Labor (IZA).
  4. Menusch Khadjavi & Jasper D. Tjaden, 2014. "Setting the Bar - An Experimental Investigation of Immigration Requirements," Kiel Working Papers 1939, Kiel Institute for the World Economy.
  5. Engel, Christoph & Beckenkamp, Martin & Glöckner, Andreas & Irlenbusch, Bernd & Hennig-Schmidt, Heike & Kube, Sebastian & Kurschilgen, Michael & Morell, Alexander & Nicklisch, Andreas & Normann, Hans, 2014. "First impressions are more important than early intervention: Qualifying broken windows theory in the lab," International Review of Law and Economics, Elsevier, Elsevier, vol. 37(C), pages 126-136.
  6. Maren Bachke & Frode Alfnes & Mette Wik, 2012. "Eliciting donor preferences," Artefactual Field Experiments, The Field Experiments Website 00098, The Field Experiments Website.
  7. Cherry, Josh & Salant, Stephen & Uler, Neslihan, 2013. "Experimental Departures from Self-Interest when Competing Partnerships Share Output," Discussion Papers, Resources For the Future dp-13-07, Resources For the Future.
  8. Lorenzo Cerda Planas, 2014. "Moving to Greener Societies: Moral Motivation and Green Behaviour," Documents de travail du Centre d'Economie de la Sorbonne, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne 14035, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
  9. Christoph Engel & Sebastian Kube & Michael Kurschilgen, 2011. "Can we manage first impressions in cooperation problems? An experimental study on “Broken (and Fixed) Windows”," Working Paper Series of the Max Planck Institute for Research on Collective Goods, Max Planck Institute for Research on Collective Goods 2011_05, Max Planck Institute for Research on Collective Goods.
  10. Lorenzo Cerda Planas, 2014. "Moving to Greener Societies: Moral Motivation and Green Behaviour," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-01018651, HAL.

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