Dealing with the aversion to the sucker’s payoff in public goods game
AbstractA usual explanation to low levels of contribution to public goods is the fear of getting the sucker’s payoff (cooperation by the participant and defection by the other players). In order to disentangle the effect of this fear from other motives, we design a public good game where people have an insurance against getting the sucker’s payoff. We show that contributions to the public good under this ‘protective’ design are significantly higher and interact with expectations on other individuals' contribution to the public good. Some policy implications and extensions are suggested.
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Bibliographic InfoPaper provided by LAMETA, Universtiy of Montpellier in its series Working Papers with number 09-27.
Length: 12 pages
Date of creation: Dec 2009
Date of revision: Dec 2009
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-01-10 (All new papers)
- NEP-CBE-2010-01-10 (Cognitive & Behavioural Economics)
- NEP-EXP-2010-01-10 (Experimental Economics)
- NEP-GTH-2010-01-10 (Game Theory)
- NEP-PBE-2010-01-10 (Public Economics)
- NEP-PUB-2010-01-10 (Public Finance)
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