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Risk and Cooperation: Experimental Evidence from Stochastic Public Good Games

Author

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  • Vesely, Stepan

    (Department of Psychology, Norwegian University of Science and Technology)

  • Wengström, Erik

    (Department of Economics, Lund University)

Abstract

Outcomes in social dilemmas often have a stochastic component. We report experimental findings from public good games with both correlated and independent risk across players. We find that the presence of both types of risk prevents the decay of cooperation typically observed in the standard deterministic public good game. The results further suggest that it is greater relative importance of social norms or warm glow giving, rather than risk sharing opportunities that foster cooperation in our stochastic public good game.

Suggested Citation

  • Vesely, Stepan & Wengström, Erik, 2017. "Risk and Cooperation: Experimental Evidence from Stochastic Public Good Games," Working Papers 2017:3, Lund University, Department of Economics.
    • Handle: RePEc:hhs:lunewp:2017_003
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    Cited by:

    1. Olschewski, Sebastian & Jakob, Lukas & Schmidt, Ulrich, 2023. "Investor preferences for positive social externalities and state-owned enterprises’ facilitated access to capital," Open Access Publications from Kiel Institute for the World Economy 266914, Kiel Institute for the World Economy (IfW Kiel).
    2. Emma von Essen & Marieke Huysentruyt & Topi Miettinen, 2019. "Exploration in Teams and the Encouragement Effect: Theory and Evidence," Economics Working Papers 2019-10, Department of Economics and Business Economics, Aarhus University.
    3. Angela C. M. Oliveira, 2021. "When risky decisions generate externalities," Journal of Risk and Uncertainty, Springer, vol. 63(1), pages 59-79, August.
    4. Bilancini, Ennio & Boncinelli, Leonardo & Nardi, Chiara & Pizziol, Veronica, 2023. "Cooperation is unaffected by the threat of severe adverse events in Public Goods Games," OSF Preprints yrt63, Center for Open Science.
    5. Emma von Essen & Marieke Huysentruyt & Topi Miettinen, 2020. "Exploration in Teams and the Encouragement Effect: Theory and Experimental Evidence," Management Science, INFORMS, vol. 66(12), pages 5861-5885, December.

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    More about this item

    Keywords

    risk pooling; risk sharing; social norms; linear public goods game; cooperation decay; stable cooperation;
    All these keywords.

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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