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Framing and Misperceptions in a Public Good Experiment

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Author Info

  • Toke Fosgaard

    () (Institute of Food and Resource Economics, University of Copenhagen)

  • Lars Gårn Hansen

    () (Institute of Food and Resource Economics, University of Copenhagen)

  • Erik Wengström

    () (Department of Economics, University of Lund, Department of Economics, University of Copenhagen)

Abstract

Earlier studies have found that a substantial part of the contributions in public good games can be explained by subjects misperceiving the game's incentives. Using a large-scale public good experiment, we show that subtle changes in how the game is framed substantially affect such misperceptions and that this explains major parts of framing effect on subjects' behavior. When controlling for the different levels of misperception between frames, the framing effect on subjects' cooperation preferences disappears. This suggests that merely changing how tax-, fine- or subsidy systems are framed, without reducing complexity, could reduce welfare loss from misperception of incentives.

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Bibliographic Info

Paper provided by University of Copenhagen, Institute of Food and Resource Economics in its series FOI Working Paper with number 2011/11.

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Length: 33 pages
Date of creation: Jul 2011
Date of revision: Aug 2011
Handle: RePEc:foi:wpaper:2011_11

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Related research

Keywords: Public goods; Cooperation; Misperception; Game form recognition; Framing effects; Internet experiment;

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  1. Ralph-C Bayer & Elke Renner & Rupert Sausgruber, 2009. "Confusion and Reinforcement Learning in Experimental Public Goods Games," NRN working papers 2009-22, The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria.
  2. Eileen Chou & Margaret McConnell & Rosemarie Nagel & Charles Plott, 2009. "The control of game form recognition in experiments: understanding dominant strategy failures in a simple two person “guessing” game," Experimental Economics, Springer, vol. 12(2), pages 159-179, June.
  3. Paul J. Ferraro & Christian A. Vossler, 2010. "The Source and Significance of Confusion in Public Goods Experiments," The B.E. Journal of Economic Analysis & Policy, Berkeley Electronic Press, vol. 10(1), pages 53.
  4. Raj Chetty & Adam Looney & Kory Kroft, 2009. "Salience and Taxation: Theory and Evidence," American Economic Review, American Economic Association, vol. 99(4), pages 1145-77, September.
  5. Daniel Houser & Robert Kurzban, 2002. "Revisiting Kindness and Confusion in Public Goods Experiments," American Economic Review, American Economic Association, vol. 92(4), pages 1062-1069, September.
  6. Susan Dynarski & Judith E. Scott-Clayton, 2008. "Complexity and Targeting in Federal Student Aid: A Quantitative Analysis," NBER Working Papers 13801, National Bureau of Economic Research, Inc.
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