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Logit estimation of conditional cooperation in a repeated public goods experiment

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Author Info
Luis G. Gonzalez ()
Vittoria Levati ()
Graciela Gonzalez-Farias

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Abstract

A conditional cooperator in a public goods game wants to match his partners' expected contribution. We investigate theoretically and empirically whether (and to what extent) conditional cooperation can explain how individual contributions evolve in a repeated two-person public goods experiment using a perfect strangers design. To identify a random utility model including non-pecuniary preferences we elicit participants' beliefs. Our econometric results show that the distribution of preferences in the population can be captured by a latent-class mixed logit specification with three subpopulations, and that 55% of participants can be regarded as conditional cooperators. Thus, the decline in average contribution levels may be attributed to the presence of conditional cooperators who have to revise their expectations about the others' behavior.

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Publisher Info
Paper provided by Max Planck Institute of Economics, Strategic Interaction Group in its series Discussion Papers on Strategic Interaction with number 2005-05.

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Length: 28 pages
Date of creation: Feb 2005
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Handle: RePEc:esi:discus:2005-05

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Related research
Keywords: Conditional cooperation Quantal response equilibrium Latent class logit Belief learning

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Charles F. Manski, 2004. "Measuring Expectations," Econometrica, Econometric Society, vol. 72(5), pages 1329-1376, 09. [Downloadable!] (restricted)
  2. 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)
  3. McFadden, Daniel, 1999. "Rationality for Economists?," Journal of Risk and Uncertainty, Springer, vol. 19(1-3), pages 73-105, December. [Downloadable!] (restricted)
    Other versions:
  4. Ernst Fehr & Klaus M. Schmidt, . "A Theory of Fairness, Competition and Cooperation," IEW - Working Papers iewwp004, Institute for Empirical Research in Economics - IEW. [Downloadable!]
    Other versions:
  5. Gary E. Bolton & Axel Ockenfels, 2000. "ERC: A Theory of Equity, Reciprocity, and Competition," American Economic Review, American Economic Association, vol. 90(1), pages 166-193, March. [Downloadable!] (restricted)
  6. Anderson, Simon P. & Goeree, Jacob K. & Holt, Charles A., 1998. "A theoretical analysis of altruism and decision error in public goods games," Journal of Public Economics, Elsevier, vol. 70(2), pages 297-323, November. [Downloadable!] (restricted)
  7. Richard Mckelvey & Thomas Palfrey, 1998. "Quantal Response Equilibria for Extensive Form Games," Experimental Economics, Springer, vol. 1(1), pages 9-41, June. [Downloadable!] (restricted)
  8. McKelvey Richard D. & Palfrey Thomas R., 1995. "Quantal Response Equilibria for Normal Form Games," Games and Economic Behavior, Elsevier, vol. 10(1), pages 6-38, July. [Downloadable!] (restricted)
  9. Bernheim, B Douglas, 1984. "Rationalizable Strategic Behavior," Econometrica, Econometric Society, vol. 52(4), pages 1007-28, July. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Annamaria Fiore & M. Vittoria Levati & Andrea Morone, 2006. "Voluntary contributions with imperfect information: An experimental study," Discussion Papers on Strategic Interaction 2006-30, Max Planck Institute of Economics, Strategic Interaction Group. [Downloadable!]
  2. Katinka Pantzy & Anthony Ziegelmeyer, 2006. "Cooperative Networks: Theory and Experimental Evidence," Discussion Papers on Strategic Interaction 2005-32, Max Planck Institute of Economics, Strategic Interaction Group. [Downloadable!]
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