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Relative performance of two simple incentive mechanisms in a public good experiment

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Author Info
Juergen Bracht (Department of Economics, University of Aberdeen Business School)
Charles Figuières () (INRA, UMR LAMETA)
Marisa Ratto (Leverhulme Centre for Market and Public Organisation, University of Bristol)

Additional information is available for the following registered author(s):

Abstract

The paper reports on experiments designed to compare the performance of two incentive mechanisms in public goods problems. One mechanism rewards and penalizes deviations from the average contribution of the other agents to the public good (tax-subsidy mechanism). Another mechanism allows agents to subsidize the other agents’ contributions (compensation mechanism). It is found that both mechanisms lead to an increase in the level of contribution to the public good. The tax-subsidy mechanism allows for good point prediction of the average level of contribution. The compensation mechanism predicts the level of contributions less reliably.

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Publisher Info
Paper provided by Institut d'economie publique (IDEP), Marseille, France in its series IDEP Working Papers with number 0409.

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Length: 44 pages
Date of creation: Nov 2004
Date of revision:
Handle: RePEc:iep:wpidep:0409

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Related research
Keywords: public goods voluntary provision incentive mechanisms.

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Find related papers by JEL classification:
H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
D62 - Microeconomics - - Welfare Economics - - - Externalities

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References listed on IDEAS
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  6. Guttman, Joel M, 1978. "Understanding Collective Action: Matching Behavior," American Economic Review, American Economic Association, vol. 68(2), pages 251-55, May. [Downloadable!] (restricted)
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  10. Marc WILLINGER & Anthony ZIEGELMEYER, 1999. "Framing and cooperation in public good games: an experiment with an interior solution," Working Papers of BETA 9901, Bureau d'Economie Théorique et Appliquée, ULP, Strasbourg. [Downloadable!]
    Other versions:
  11. Harstad, Ronald M. & Marrese, Michael, 1981. "Implementation of mechanism by processes : Public good allocation experiments," Journal of Economic Behavior & Organization, Elsevier, vol. 2(2), pages 129-151, June. [Downloadable!] (restricted)
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    Other versions:
  14. Danziger, Leif & Schnytzer, Adi, 1991. "Implementing the Lindahl voluntary-exchange mechanism," European Journal of Political Economy, Elsevier, vol. 7(1), pages 55-64, April. [Downloadable!] (restricted)
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  16. repec:att:wimass:19199918 is not listed on IDEAS
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  20. Ernst Fehr & Bettina Rockenbach, 2003. "Detrimental effects of sanctions on human altruism," Microeconomics 0305007, EconWPA. [Downloadable!]
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