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Dynamic Analysis of the Evolution of Conventions in a Public Goods Experiment with Intergenerational Advice

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Author Info
Ananish Chaudhuri
Pushkar Maitra

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Abstract

In this paper we analyse contributions to a public good within an inter-generational framework where at the end of each session one generation of subjects leave advice for the succeeding generation via free form messages. Such advice can be private (advice left by one player in generation is given only to her immediate successor in generation) or public (advice left by players of generation is made available to all members of generation). We estimate a panel regression model that enables us to understand the dynamics of the process better and to highlight the learning that occurs over time. Our estimation results show that contributions in any period depend crucially on contributions in the previous period and on the group average in the previous period - more specifically whether a subject's own contribution in the previous period fell above or below the group average. We find that in the public advice treatment when a subject's contribution fell below the group average in the previous period there is a tendency on the part of that subject to increase contributions in the next period.

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Paper provided by Econometric Society in its series Econometric Society 2004 North American Summer Meetings with number 37.

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Date of creation: 11 Aug 2004
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Handle: RePEc:ecm:nasm04:37

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Related research
Keywords: Voluntary contributions mechanism; Public goods; Experiments; Panel Data; Generations;

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Find related papers by JEL classification:
C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data
C34 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Truncated and Censored Models

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References listed on IDEAS
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  1. Isaac, R. Mark & McCue, Kenneth F. & Plott, Charles R., . "Public Goods Provision in an Experimental Environment," Working Papers 428, California Institute of Technology, Division of the Humanities and Social Sciences. [Downloadable!]
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  2. Andrew Schotter & Barry Sopher, 2003. "Social Learning and Coordination Conventions in Intergenerational Games: An Experimental Study," Journal of Political Economy, University of Chicago Press, vol. 111(3), pages 498-529, June. [Downloadable!] (restricted)
    Other versions:
  3. Matthew Rabin, 1998. "Psychology and Economics," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 11-46, March. [Downloadable!] (restricted)
  4. 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)
  5. Shotter, A. & Sopher, B., 2001. "Advice and Behavior in Intergenerational Ultimatum Games: An Experimental Approach," Working Papers 01-04, C.V. Starr Center for Applied Economics, New York University. [Downloadable!]
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  6. Ernst Fehr & Simon Gachter, 2000. "Cooperation and Punishment in Public Goods Experiments," American Economic Review, American Economic Association, vol. 90(4), pages 980-994, September. [Downloadable!] (restricted)
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  7. Andrew Schotter, 2003. "Decision Making with Naive Advice," American Economic Review, American Economic Association, vol. 93(2), pages 196-201, May. [Downloadable!]
  8. Chaudhuri, A. & Schotter, A. & Sopher, B., 2001. "Talking Ourselves to Efficiency: Coordination in Inter-Generational Minimum Games with Private, Almost Common and Common Knowledge of Advice," Working Papers 01-11, C.V. Starr Center for Applied Economics, New York University. [Downloadable!]
  9. Keser, Claudia & van Winden, Frans, 2000. " Conditional Cooperation and Voluntary Contributions to Public Goods," Scandinavian Journal of Economics, Blackwell Publishing, vol. 102(1), pages 23-39, March. [Downloadable!] (restricted)
  10. Isaac, R Mark & Walker, James M, 1988. "Group Size Effects in Public Goods Provision: The Voluntary Contributions Mechanism," The Quarterly Journal of Economics, MIT Press, vol. 103(1), pages 179-99, February. [Downloadable!] (restricted)
  11. Claudia Keser & Frans A.A.M. van Winden, 2000. "Conditional Cooperation and Voluntary Contributions to Public Goods," Tinbergen Institute Discussion Papers 00-011/1, Tinbergen Institute. [Downloadable!]
  12. Andereoni, J., 1988. "Why Free Ride? Strategies And Learning In Public Goods Experiments," Working papers 375, Wisconsin Madison - Social Systems.
  13. Andreoni, James, 1995. "Cooperation in Public-Goods Experiments: Kindness or Confusion?," American Economic Review, American Economic Association, vol. 85(4), pages 891-904, September. [Downloadable!] (restricted)
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