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On the behavioural relevance of optional and mandatory impure public goods: results from a laboratory experiment

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  • Dirk Engelmann

    (University of Mannheim)

  • Alistair Munro

    (National Graduate Institute for Policy Studies)

  • Marieta Valente

    (University of Minho)

Abstract

Ethical goods are increasingly available in markets for conventional goods giving pro-ethically motivated consumers a convenient option to contribute to public goods. In a previous experiment we explored the behavioural relevance of impure public goods in a within-subject setting and observed reduced aggregate pro-social behavior in the presence of impure goods that favor private consumption at the expense of public good provision. In this experiment, we implement a between-subject design to test the behavioural relevance of impure public goods with only a token contribution to a public good cause. From a theoretical perspective, assuming people demand private and public characteristics regardless of how they are provided, we would expect no behavioural relevance of the presence of impure public goods. However, this experiment establishes that pro-social behaviour defined as contributing to a public good, is negatively affected by impure goods with token contributions, in comparison to when they are absent. Furthermore, if the token impure good is mandatory instead of optional the negative effect on pro-social behaviour seems to be offset. The results from this experiment suggest impure public goods are not behaviourally irrelevant, can decrease pro-social behaviour but their optional or mandatory nature can have different behavioural consequences.

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Bibliographic Info

Paper provided by National Graduate Institute for Policy Studies in its series GRIPS Discussion Papers with number 11-17.

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Length: 25 pages
Date of creation: Jan 2012
Date of revision:
Handle: RePEc:ngi:dpaper:11-17

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  1. Eckel, Catherine C. & Grossman, Philip J., 1996. "Altruism in Anonymous Dictator Games," Games and Economic Behavior, Elsevier, vol. 16(2), pages 181-191, October.
  2. Alistair Munro & Marieta Valente, 2008. "Green goods: are they good or bad news for the environment? Evidence from a laboratory experiment on impure public goods," NIMA Working Papers 37, Núcleo de Investigação em Microeconomia Aplicada (NIMA), Universidade do Minho, revised Dec 2011.
  3. Sebastian J. Goerg & Johannes Kaiser, 2009. "Nonparametric testing of distributions—the Epps–Singleton two-sample test using the empirical characteristic function," Stata Journal, StataCorp LP, vol. 9(3), pages 454-465, September.
  4. Matthew J. Kotchen, 2006. "Green Markets and Private Provision of Public Goods," Journal of Political Economy, University of Chicago Press, vol. 114(4), pages 816-845, August.
  5. Cornes, Richard & Sandler, Todd, 1994. "The comparative static properties of the impure public good model," Journal of Public Economics, Elsevier, vol. 54(3), pages 403-421, July.
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  7. Dana, Jason & Cain, Daylian M. & Dawes, Robyn M., 2006. "What you don't know won't hurt me: Costly (but quiet) exit in dictator games," Organizational Behavior and Human Decision Processes, Elsevier, vol. 100(2), pages 193-201, July.
  8. Edward P. Lazear & Ulrike Malmendier & Roberto A. Weber, 2012. "Sorting in Experiments with Application to Social Preferences," American Economic Journal: Applied Economics, American Economic Association, vol. 4(1), pages 136-63, January.
  9. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-38, May.
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Cited by:
  1. Gerrit Frackenpohl & Gert Pönitzsch, 2013. "Bundling Public with Private Goods," Bonn Econ Discussion Papers bgse05_2013, University of Bonn, Germany.
  2. Bo Chen, 2013. "Assignment Games with Externalities And Matching-Based Competition," Bonn Econ Discussion Papers bgse08_2013, University of Bonn, Germany.

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