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Delegation and Coordination with Multiple Threshold Public Goods: Experimental Evidence

Author

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  • Corazzini, Luca

    (Ca' Foscari University of Venice)

  • Cotton, Christopher

    (Queen's University)

  • Reggiani, Tommaso G.

    (Cardiff University)

Abstract

When multiple charities, social programs and community projects simultaneously vie for funding, donors risk miscoordinating their contributions leading to an inefficient distribution of funding across projects. Community chests and other intermediary organizations facilitate coordination among donors and reduce such risks. To study this, we extend a threshold public goods framework to allow donors to contribute through an intermediary rather than directly to the public goods. Through a series of experiments, we show that the presence of an intermediary increases public good success and subjects' earnings only when the intermediary is formally committed to direct donations to socially beneficial goods. Without such a restriction, the presence of an intermediary has a negative impact, complicating the donation environment, decreasing contributions and public good success.

Suggested Citation

  • Corazzini, Luca & Cotton, Christopher & Reggiani, Tommaso G., 2019. "Delegation and Coordination with Multiple Threshold Public Goods: Experimental Evidence," IZA Discussion Papers 12817, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp12817
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    Cited by:

    1. Cason, Timothy N. & Tabarrok, Alex & Zubrickas, Robertas, 2021. "Early refund bonuses increase successful crowdfunding," Games and Economic Behavior, Elsevier, vol. 129(C), pages 78-95.
    2. Miloš Fišar & Tommaso Reggiani & Fabio Sabatini & Jiří Špalek, 2022. "Media negativity bias and tax compliance: experimental evidence," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 29(5), pages 1160-1212, October.
    3. Takeuchi, Ai & Seki, Erika, 2023. "Coordination and free-riding problems in the provision of multiple public goods," Journal of Economic Behavior & Organization, Elsevier, vol. 206(C), pages 95-121.
    4. Fišar, Miloš & Reggiani, Tommaso G. & Sabatini, Fabio & Špalek, Jiří, 2020. "Media Bias and Tax Compliance: Experimental Evidence," IZA Discussion Papers 12938, Institute of Labor Economics (IZA).
    5. Abraham, Diya & Corazzini, Luca & Fišar, Miloš & Reggiani, Tommaso, 2023. "Coordinating donations via an intermediary: The destructive effect of a sunk overhead cost," Journal of Economic Behavior & Organization, Elsevier, vol. 211(C), pages 287-304.
    6. Gans, Joshua S. & Landry, Peter, 2022. "I’m not sure what to think about them: Confronting naive present bias in a dynamic threshold public goods game," Journal of Economic Behavior & Organization, Elsevier, vol. 197(C), pages 195-204.
    7. Ai Takeuchi & Erika Seki, 2023. "Overcoming problems of coordination and freeriding in a game with multiple public goods: dynamic contribution with information provision," The Japanese Economic Review, Springer, vol. 74(3), pages 379-411, July.
    8. Luca Corazzini & Matteo M. Marini, 2022. "Focal points in multiple threshold public goods games: A single-project meta-analysis," MUNI ECON Working Papers 2022-10, Masaryk University, revised Feb 2023.
    9. Krčál, Ondřej & Peer, Stefanie & Staněk, Rostislav & Karlínová, Bára, 2019. "Real consequences matter: Why hypothetical biases in the valuation of time persist even in controlled lab experiments," Economics of Transportation, Elsevier, vol. 20(C).
    10. Luca Corazzini & Christopher Cotton & Enrico Longo & Tommaso Reggiani, 2021. "The Gates Effect in Public Goods Experiments: How Donations Flow to the Recipients Favored by the Wealthy," MUNI ECON Working Papers 2021-13, Masaryk University, revised Feb 2023.
    11. Brock V. Stoddard & Caleb A. Cox & James M. Walker, 2021. "Incentivizing provision of collective goods: Allocation rules," Southern Economic Journal, John Wiley & Sons, vol. 87(4), pages 1345-1365, April.
    12. Diya Elizabeth Abraham & Luca Corazzini & Miloš Fišar & Tommaso Reggiani, 2021. "Delegation and Overhead Aversion with Multiple Threshold Public Goods," MUNI ECON Working Papers 2021-14, Masaryk University, revised Feb 2023.
    13. Luca Corazzini & Christopher Cotton & Enrico Longo & Tommaso Reggiani, 2022. "Pro-Rich and Progressive: Policy Selection and Contributions in Threshold Public Goods Experiments," Working Paper 1471, Economics Department, Queen's University.

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    More about this item

    Keywords

    laboratory experiment; threshold public goods; delegation; fundraising;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • H40 - Public Economics - - Publicly Provided Goods - - - General
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship

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