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Full agreement and the provision of threshold public goods

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  • Federica Alberti

    ()
    (Max Planck Institute of Economics, Strategic Interaction Group, Jena)

  • Edward J. Cartwright

    ()
    (School of Economics, University of Kent, Canterbury)

Abstract

We report threshold public good experiments in which group members not only need to be individually willing to contribute enough to provide the public good but also have to agree with each other on what every group members should contribute. We find strong support to the hypothesis that full agreement increases successful provision, although it takes a few repetitions before group members can successfully coordinate. This is consistent with our theoretical results that full agreement works because it increases criticality of each individual decision. The existence of a focal point makes it possible for the group members to successfully coordinate.

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Bibliographic Info

Paper provided by Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics in its series Jena Economic Research Papers with number 2011-063.

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Date of creation: 2011
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Handle: RePEc:jrp:jrpwrp:2011-063

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Keywords: Public good; threshold; full agreement; focal point; experiment; coordination;

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  1. Croson, Rachel & Marks, Melanie, 2001. "The Effect of Recommended Contributions in the Voluntary Provision of Public Goods," Economic Inquiry, Western Economic Association International, vol. 39(2), pages 238-49, April.
  2. Janssen, Maarten C.W., 2006. "On the strategic use of focal points in bargaining situations," Journal of Economic Psychology, Elsevier, vol. 27(5), pages 622-634, October.
  3. Coats, Jennifer C. & Gronberg, Timothy J. & Grosskopf, Brit, 2009. "Simultaneous versus sequential public good provision and the role of refunds -- An experimental study," Journal of Public Economics, Elsevier, vol. 93(1-2), pages 326-335, February.
  4. Federica Alberti & Edward J. Cartwright & Anna Stepanova, 2011. "Threshold public good games and impulse balance theory," Jena Economic Research Papers 2011-062, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  5. Cadsby, Charles Bram & Maynes, Elizabeth, 1999. "Voluntary provision of threshold public goods with continuous contributions: experimental evidence," Journal of Public Economics, Elsevier, vol. 71(1), pages 53-73, January.
  6. David McEvoy, 2010. "Not it: opting out of voluntary coalitions that provide a public good," Public Choice, Springer, vol. 142(1), pages 9-23, January.
  7. Nicholas Bardsley & Judith Mehta & Chris Starmer & Robert Sugden, 2008. "Explaining Focal Points: Cognitive Hierarchy Theory versus Team Reasoning," Discussion Papers 2008-17, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
  8. Rachel Croson & Melanie Marks, 2000. "Step Returns in Threshold Public Goods: A Meta- and Experimental Analysis," Experimental Economics, Springer, vol. 2(3), pages 239-259, March.
  9. Bagnoli, Mark & McKee, Michael, 1991. "Voluntary Contribution Games: Efficient Private Provision of Public Goods," Economic Inquiry, Western Economic Association International, vol. 29(2), pages 351-66, April.
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