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Provision of Multilevel Public Goods through Positive Externalities: Experimental Evidence

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  • Werner Güth

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

  • Lauri Sääksvuori

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

Abstract

The provision of public goods regularly embodies interrelated spheres of influence on multiple scales. This article examines the nature of human behavior in a multilevel social dilemma game with positive provision externalities to local and global scales. We report experimental results showing that the behavior in multilevel games is strongly driven by asymmetric conditional cooperation prioritizing local level externalities. Our findings demonstrate how individuals adjust their behavior over time to local conditions. We do not find significant adjustment to the global group average, suggesting that the local group creates a salient reference group for social comparisons in multilevel public goods provision. Our results emphasize the importance of building strong local level commitment when designing institutional responses to promote sustainable provision of globally important public goods like the global climate.

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File URL: http://pubdb.wiwi.uni-jena.de/pdf/wp_2012_003.pdf
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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 2012-003.

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Date of creation: 02 Feb 2012
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Handle: RePEc:jrp:jrpwrp:2012-003

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Keywords: Experiment; Groups; Public good; Spillover Game; Transboundary effects;

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