An Application of the English Clock Market Mechanism to Public Goods Games
AbstractWe conducted a laboratory study with a public goods game in which contributions are not submitted all at once but incrementally as coordinated in real time by a clock. Individuals press a button as soon as the clock equals their willingness to contribute. This public goods institution exploits the idea that people are conditionally cooperative (i.e., they match at least the minimum contribution of the others) rather than opportunistic in order to implement the Pareto-optimal outcome. By providing information about the point at which subjects stopped further contributions we found that the decision of a subject to stop contributing induced an immediate reaction of the other group members. As a consequence, the individual contributions were closely related to each other and a fairer income distribution was achieved than in the standard case in which only aggregated information was supplied after each period.
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Bibliographic InfoPaper provided by Max Planck Institute of Economics, Strategic Interaction Group in its series Papers on Strategic Interaction with number 2001-04.
Length: 18 pages
Date of creation: Nov 2001
Date of revision:
Note: The authors would like to thank seminar participants at Amsterdam, Berlin, Lisbon, Paris, Turin, York and especially Werner Güth, John Bone, Rachel Croson and Frans van Winden for valuable comments. Financial support from the EU-TMR Research Network ENDEAR (FMRX-CT98-0238) is gratefully acknowledged.
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Other versions of this item:
- M. Vittoria Levati & Tibor Neugebauer, 2004. "An Application of the English Clock Market Mechanism to Public Goods Games," Experimental Economics, Springer, vol. 7(2), pages 153-169, 06.
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
This paper has been announced in the following NEP Reports:
- NEP-ALL-2002-03-04 (All new papers)
- NEP-CDM-2002-03-04 (Collective Decision-Making)
- NEP-EXP-2002-03-04 (Experimental Economics)
- NEP-GTH-2002-03-04 (Game Theory)
- NEP-MIC-2002-03-04 (Microeconomics)
- NEP-PBE-2002-03-04 (Public Economics)
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