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Dealing with the aversion to the sucker’s payoff in public goods game

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Author Info

  • Douadia Bougherara
  • Sandrine Costa
  • Gilles Grolleau
  • Lisette Ibanez

Abstract

A 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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File URL: http://www.lameta.univ-montp1.fr/Documents/DR2009-27.pdf
File Function: First version, 2009
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Bibliographic Info

Paper provided by LAMETA, Universtiy of Montpellier in its series Working Papers with number 09-27.

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Length: 12 pages
Date of creation: Dec 2009
Date of revision: Dec 2009
Handle: RePEc:lam:wpaper:09-27

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  1. Bruno Frey & Matthias Benz & Alois Stutzer, 2004. "Introducing Procedural Utility: Not Only What, but Also How Matters," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 160(3), pages 377-, September.
  2. Ernst Fehr & Simon Gaechter, . "Cooperation and Punishment in Public Goods Experiments," IEW - Working Papers 010, Institute for Empirical Research in Economics - University of Zurich.
  3. Cason, Timothy N. & Gangadharan, Lata, 2002. "Environmental Labeling and Incomplete Consumer Information in Laboratory Markets," Journal of Environmental Economics and Management, Elsevier, vol. 43(1), pages 113-134, January.
  4. John A. List & David Lucking-Reiley, 2002. "The Effects of Seed Money and Refunds on Charitable Giving: Experimental Evidence from a University Capital Campaign," Journal of Political Economy, University of Chicago Press, vol. 110(1), pages 215-233, February.
  5. Rachel T. A. Croson, 2007. "Theories Of Commitment, Altruism And Reciprocity: Evidence From Linear Public Goods Games," Economic Inquiry, Western Economic Association International, vol. 45(2), pages 199-216, 04.
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Cited by:
  1. Philippe Delacote & Claire Montagné-Huck, 2012. "Political consumerism and public policy: good complements against market failures?," Working Papers 167880, Institut National de la Recherche Agronomique, France.

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