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The Implications of Risk and Uncertainty Aversion in Public Goods Games

Author

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  • Veronika Nemes

    (Centre for Energy and Environmental Markets, The University of New South Wales and Victorian Government Department of Sustainability and Environment.)

  • Lata Gangadharan

    (Department of Economics, Monash University)

Abstract

In this paper we examine how individuals behave in situations of risk and uncertainty in public and private goods context. We find that subjects are willing to pay a much higher amount to find out information relating to the probabilities of providing the private good than information relating to the public good even if this information has greater consequences for the individual in he public goods context. We find strong support for the free-rider hypothesis and extend it to cases when risk and uncertainty are present. We find that subjects treat risks and uncertainties associated with the provision of private good and public good differently.

Suggested Citation

  • Veronika Nemes & Lata Gangadharan, 2011. "The Implications of Risk and Uncertainty Aversion in Public Goods Games," Environmental Economics Research Hub Research Reports 10107, Environmental Economics Research Hub, Crawford School of Public Policy, The Australian National University.
    • Handle: RePEc:een:eenhrr:10107
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    References listed on IDEAS

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