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Does aversion to the sucker's payoff matter in public goods games?

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  • 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 assurance 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.rennes.inra.fr/smart/Media/Working-papers/WP09-08
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Bibliographic Info

Paper provided by INRA UMR SMART in its series Working Papers SMART - LERECO with number 09-08.

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Date of creation: 2009
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Handle: RePEc:rae:wpaper:200908

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Keywords: Experiments; Public good; Sucker’s payoff; Assurance;

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  1. Cason, T.N. & Gangadharan, L., 1999. "Environmental Labeling and Incomplete Consumer Information in Laboratory Markets," Department of Economics - Working Papers Series 708, The University of Melbourne.
  2. 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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