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Giving Little by Little: Dynamic Voluntary Contribution Games

Author

Listed:
  • Lise Vesterlund
  • John Duffy
  • Jack Ochs

Abstract

Shelling (1960) among others have argued that contributions to public goods may be larger if people spread their contributions and give one small contribution at a time. Examining a threshold public good environment, Marx and Matthews (2000) show that multiple rounds may secure a provision level that cannot be achieved when only one round of contributions is available. Interestingly, sequential contributions both increase the benefit of giving and the cost of free riding. In some environments, zero provision is the unique equilibrium of the one-round contribution game, whereas there are equilibria that reach the threshold in the multiple-round game. We study such an environment experimentally. While initially contributions appear to respond to the possibility of making multiple small contributions, this difference diminishes very quickly. Overall there is little evidence that contributions are larger when individuals slowly can contribute to the public good.

Suggested Citation

  • Lise Vesterlund & John Duffy & Jack Ochs, 2004. "Giving Little by Little: Dynamic Voluntary Contribution Games," Econometric Society 2004 North American Winter Meetings 402, Econometric Society.
    • Handle: RePEc:ecm:nawm04:402
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Public goods; experiments; fundraising;
    All these keywords.

    JEL classification:

    • L3 - Industrial Organization - - Nonprofit Organizations and Public Enterprise

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