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An Econometric Analysis of Voluntary Contributions

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Author Info
Nicholas Bardsley () (University of Amsterdam)
Peter G. Moffatt (University of East Anglia)

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Abstract

Contributions to public goods simulated in economists' laboratory experiments have two peculiarities from the perspective of statistical modelling. There is a variety of contributor behaviours (Ledyard, 1995), suggestive perhaps of separate classes of individuals, and contributions are doubly censored. We present an econometric model of contributions in sequential play, which takes into account the censoring, admits variation both within and between individuals, and allows for the existence of a distinct class of free-riders. The model synthesises the 2-limit tobit analysis of Nelson (1976), the extension of tobit to panel techniques by Kim and Maddala (1992) and the "p-tobit" hurdle model of Deaton and Irish (1984). We estimate it for panel data from a public good experiment reported in Bardsley (2000). It reveals pronounced inter- and intra- individual variation, and shows significant effects for subjects' order in a sequential game, others' contributions and the position of the choice task within the experiment. These effects are plausibly attributable to egoism, reciprocity and learning respectively. In addition, the existence of a distinct class of free-riders, who conform to a game theoretic prediction of unconditional non- contribution, is confirmed. The model is estimated for tasks in which "others' behaviour" was controlled by the experimenter (but without using deception). We compare its predictions for actual play (in which others' behaviour is not controlled) with behaviour in a real game task. The predictions are consistent with the data.

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Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 00-111/1.

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Date of creation: 18 Dec 2000
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Handle: RePEc:dgr:uvatin:20000111

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  1. Andreoni, James, 1988. "Why free ride? : Strategies and learning in public goods experiments," Journal of Public Economics, Elsevier, vol. 37(3), pages 291-304, December. [Downloadable!] (restricted)
  2. Deaton, Angus & Irish, Margaret, 1984. "Statistical models for zero expenditures in household budgets," Journal of Public Economics, Elsevier, vol. 23(1-2), pages 59-80. [Downloadable!] (restricted)
  3. Offerman, Theo & Sonnemans, Joep & Schram, Arthur, 1996. "Value Orientations, Expectations and Voluntary Contributions in Public Goods," Economic Journal, Royal Economic Society, vol. 106(437), pages 817-45, July. [Downloadable!] (restricted)
  4. Nicholas Bardsley, 2000. "Control Without Deception: Individual Behaviour in Free-Riding Experiments Revisited," Experimental Economics, Springer, vol. 3(3), pages 215-240, December. [Downloadable!] (restricted)
  5. Weimann, Joachim, 1994. "Individual behaviour in a free riding experiment," Journal of Public Economics, Elsevier, vol. 54(2), pages 185-200, June. [Downloadable!] (restricted)
  6. Sugden, Robert, 1984. "Reciprocity: The Supply of Public Goods through Voluntary Contributions," Economic Journal, Royal Economic Society, vol. 94(376), pages 772-87, December. [Downloadable!] (restricted)
  7. Jordi Brandts & Gary Charness, 2000. "Hot vs. Cold: Sequential Responses and Preference Stability in Experimental Games," Experimental Economics, Springer, vol. 2(3), pages 227-238, March. [Downloadable!] (restricted)
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  8. Andereoni, J., 1988. "Why Free Ride? Strategies And Learning In Public Goods Experiments," Working papers 375, Wisconsin Madison - Social Systems.
  9. Robin Cubitt & Chris Starmer & Robert Sugden, 1998. "On the Validity of the Random Lottery Incentive System," Experimental Economics, Springer, vol. 1(2), pages 115-131, September. [Downloadable!] (restricted)
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