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Context effects in a negative externality experiment

Author

Listed:
  • Kent D. Messer

    (Department of Food & Resource Economics,University of Delaware)

  • Jordan F. Suter

    (Department of Economics and Environmental Studies,Oberlin College)

  • Jubo Yan

    (Graduate Student, Cornell University)

Abstract

This study investigates the degree to which framing and context influence observed rates of free-riding behavior in a negative externality laboratory experiment. Building on the work of Andreoni (1995a) and Messer et al. (2007) we frame the decision not to contribute to a public fund as generating a negative externality on other group members. The experimental treatments involving 252 subjects vary communication, voting, and the status quo of the initial endowment. Results indicate that allowing groups the opportunity to communicate and vote significantly reduces rates of free-riding, and this effect is especially pronounced when initial endowments are placed in the private as opposed to the public fund.

Suggested Citation

  • Kent D. Messer & Jordan F. Suter & Jubo Yan, 2010. "Context effects in a negative externality experiment," Working Papers 10-09, University of Delaware, Department of Economics.
  • Handle: RePEc:dlw:wpaper:10-09.
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    File URL: http://graduate.lerner.udel.edu/sites/default/files/ECON/PDFs/RePEc/dlw/WorkingPapers/2010/UDWP2010-09.pdf
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    More about this item

    Keywords

    Negative externality; voluntary contribution mechanism; cheap talk; voting; status quo bias; experimental economics;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • H4 - Public Economics - - Publicly Provided Goods

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