Crossing the Point of No Return: A Public Goods Experiment
AbstractParticipants in a public goods experiment receive private or common signals regarding the so-called "point of no return", meaning that if the group's total contribution falls below this point, all payoffs are reduced. An individual faces the usual conflict between private and collective interests above the point of no return, while he incurs the risk of damaging everyone by not surpassing the point. Our data reveal that contributions are higher if the cost of not reaching the threshold is high. In particular if the signal is private, many subjects are not willing to provide the necessary contribution.
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Bibliographic InfoPaper provided by Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics in its series Jena Economic Research Papers with number 2011-059.
Date of creation: 16 Dec 2011
Date of revision:
Public goods; provision point mechanism; experiments; reduction factor; signal;
Other versions of this item:
- Urs Fischbacher & Werner GŸth & M. Vittoria Levati, 2011. "Crossing the Point of No Return: A Public Goods Experiment," TWI Research Paper Series 72, Thurgauer Wirtschaftsinstitut, Universität Konstanz.
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
- C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-01-03 (All new papers)
- NEP-CBE-2012-01-03 (Cognitive & Behavioural Economics)
- NEP-CTA-2012-01-03 (Contract Theory & Applications)
- NEP-EXP-2012-01-03 (Experimental Economics)
- NEP-GTH-2012-01-03 (Game Theory)
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