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Giving Little by Little: Dynamic Voluntary Contribution Games

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  • 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.

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Bibliographic Info

Paper provided by Econometric Society in its series Econometric Society 2004 North American Winter Meetings with number 402.

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Date of creation: 11 Aug 2004
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Handle: RePEc:ecm:nawm04:402

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Keywords: Public goods; experiments; fundraising;

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References

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  1. Andreoni, James & Brown, Paul M. & Vesterlund, Lise, 2002. "What Makes an Allocation Fair? Some Experimental Evidence," Games and Economic Behavior, Elsevier, vol. 40(1), pages 1-24, July.
  2. Werner Güth & Maria Vittoria Levati & Andreas Stiehler, . "Privately Contributing to Public Goods over Time - An Experimental Study -," Papers on Strategic Interaction 2002-01, Max Planck Institute of Economics, Strategic Interaction Group.
  3. Marx, Leslie M & Matthews, Steven A, 2000. "Dynamic Voluntary Contribution to a Public Project," Review of Economic Studies, Wiley Blackwell, vol. 67(2), pages 327-58, April.
  4. 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.
  5. Andreoni, James & Samuelson, Larry, 2006. "Building rational cooperation," Journal of Economic Theory, Elsevier, vol. 127(1), pages 117-154, March.
  6. Marks, Melanie & Croson, Rachel, 1998. "Alternative rebate rules in the provision of a threshold public good: An experimental investigation," Journal of Public Economics, Elsevier, vol. 67(2), pages 195-220, February.
  7. Olivier Compte & Philippe Jehiel, 2004. "Gradualism in Bargaining and Contribution Games," Review of Economic Studies, Oxford University Press, vol. 71(4), pages 975-1000.
  8. Bergstrom, Theodore & Blume, Lawrence & Varian, Hal, 1986. "On the private provision of public goods," Journal of Public Economics, Elsevier, vol. 29(1), pages 25-49, February.
  9. Weber, Roberto A., 2003. "'Learning' with no feedback in a competitive guessing game," Games and Economic Behavior, Elsevier, vol. 44(1), pages 134-144, July.
  10. Dorsey, Robert E, 1992. " The Voluntary Contributions Mechanism with Real Time Revisions," Public Choice, Springer, vol. 73(3), pages 261-82, April.
  11. Romano, Richard & Yildirim, Huseyin, 2001. "Why charities announce donations: a positive perspective," Journal of Public Economics, Elsevier, vol. 81(3), pages 423-447, September.
  12. Vesterlund, Lise, 2003. "The informational value of sequential fundraising," Journal of Public Economics, Elsevier, vol. 87(3-4), pages 627-657, March.
  13. Moxnes, E. & Heijden, E.C.M. van der, 2000. "The Effect of Leadership in a Public Bad Experiment," Discussion Paper 2000-102, Tilburg University, Center for Economic Research.
  14. Palfrey, Thomas R & Rosenthal, Howard, 1994. "Repeated Play, Cooperation and Coordination: An Experimental Study," Review of Economic Studies, Wiley Blackwell, vol. 61(3), pages 545-65, July.
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Cited by:
  1. Cary Deck & Nikos Nikiforakis, 2010. "Perfect and Imperfect Real-Time Monitoring in a Minimum-Effort Game," Working Papers 10-18, Chapman University, Economic Science Institute.
  2. Choi, Syngjoo & Gale, Douglas & Kariv, Shachar & Palfrey, Thomas, . "Network architecture, salience and coordination," Working Papers 1291, California Institute of Technology, Division of the Humanities and Social Sciences.
  3. Ludwig, Sandra & Strassmair, Christina, 2009. "An Experimental study on the information structure in teams," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 277, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
  4. Syngjoo Choi & Douglas Gale & Shachar Kariv, 2006. "Sequential Equilibrium in Monotone Games: Theory-Based Analysis of Experimental Data," Levine's Bibliography 784828000000000278, UCLA Department of Economics.
  5. Matthews, Steven A., 2013. "Achievable outcomes of dynamic contribution games," Theoretical Economics, Econometric Society, vol. 8(2), May.
  6. de Oliveira, Angela C.M. & Croson, Rachel T.A. & Eckel, Catherine, 2011. "The giving type: Identifying donors," Journal of Public Economics, Elsevier, vol. 95(5-6), pages 428-435, June.
  7. Philip J. Grossman & Mana Komai & James E. Jensen, 2012. "Leadership and Gender in Groups: An Experiment," Development Research Unit Working Paper Series 42-12, Monash University, Department of Economics.
  8. Steven A. Matthews, 2008. "Achievable Outcomes in Smooth Dynamic Contribution Games," PIER Working Paper Archive 08-028, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
  9. Tan, Jonathan H.W. & Breitmoser, Yves & Bolle, Friedel, 2010. "Voluntary Contributions by Consent or Dissent," MPRA Paper 22001, University Library of Munich, Germany.
  10. Steven A. Matthews, 2008. "Achievable Outcomes of Dynamic Contribution Games, Second Version," PIER Working Paper Archive 11-016, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania, revised 20 Jun 2011.

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