Cooperation Is Relative: Income and Framing Effects with Public Goods
AbstractIn social dilemmas, there is tension between cooperation that promotes the common good and the pursuit of individual interests. International climate change negotiations provide one example: although abatement costs are borne by individual countries, the benefits are shared globally. We study a multi-period, threshold public goods game with unequally endowed participants and communication in which the decision variable is framed in three seemingly inconsequential ways: as absolute contributions, contributions relative to endowments and in terms of the effects of contributions on final payoffs. We find considerable agreement that “rich” (or high endowed) persons contribute more than “poor” (or low endowed) individuals at levels that are invariant across frames. Frames do, however, significantly affect both preferred and actual contributions for the poor: they contribute significantly less when the decision variable makes the effects on final payoffs salient than when it is framed in terms of absolute contributions. Contributions are explained mostly by self-interest, justice preferences, and experiencing failed negotiations, but we find no effects of reciprocity toward individuals or of the suggestions of others about what one should contribute.
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Bibliographic InfoPaper provided by Oslo University, Department of Economics in its series Memorandum with number 16/2012.
Length: 42 pages
Date of creation: 21 May 2012
Date of revision:
Contact details of provider:
Postal: Department of Economics, University of Oslo, P.O Box 1095 Blindern, N-0317 Oslo, Norway
Phone: 22 85 51 27
Fax: 22 85 50 35
Web page: http://www.oekonomi.uio.no/indexe.html
More information through EDIRC
Public good game; threshold; communication; fairness; endowment heterogeneity;
Find related papers by JEL classification:
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-09-03 (All new papers)
- NEP-CBE-2012-09-03 (Cognitive & Behavioural Economics)
- NEP-EVO-2012-09-03 (Evolutionary Economics)
- NEP-EXP-2012-09-03 (Experimental Economics)
- NEP-PUB-2012-09-03 (Public Finance)
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