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Heterogeneity and Voting: A Framed Public Good Experiment

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  • Kerri Brick
  • Martine Visser

Abstract

The lack of cooperation and prevalence of free riding in efforts to reduce emissions reflects the public good dilemma synonymous with climate change: whereby individual incentives lead to sub-optimal outcomes. This study examines how cooperative norms can be fostered through democratic processes. Specifically, we assess whether a given policy affects cooperation more significantly when it is democratically chosen by heterogeneous subjects as opposed to exogenously imposed by the experimenter. Subjects with differing marginal costs of abatement must democratically select an institution to reduce a national greenhouse gas inventory. By majority vote, subjects can choose between communication and two carbon tax variants. The experimental literature from studies with homogenous subjects suggests that cooperation improves when policy is endogenously selected as opposed to exogenously enforced. Overall we find that endogenous choice does not improve cooperation when subjects are heterogeneous. Furthermore, we find that, in the absence of a binding commitment, cooperation declines with endogenous choice as the prevalence of free-riding increases.

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Bibliographic Info

Paper provided by Economic Research Southern Africa in its series Working Papers with number 298.

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Length: 18 pages
Date of creation: 2012
Date of revision:
Handle: RePEc:rza:wpaper:298

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Keywords: heterogeneity; voting; communication; public good;

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References

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  1. Elinor Ostrom, 2000. "Collective Action and the Evolution of Social Norms," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 14(3), pages 137-158, Summer.
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  3. Kosfeld, Michael & Okada, Akira & Riedl, Arno, 2006. "Institution Formation in Public Goods Games," Research Memorandum 029, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
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  7. Charles N. Noussair & Fangfang Tan, 2011. "Voting on Punishment Systems within a Heterogeneous Group," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 13(5), pages 661-693, October.
  8. Kjell Arne Brekke & Olof Johansson-Stenman, 2008. "The behavioural economics of climate change," Oxford Review of Economic Policy, Oxford University Press, Oxford University Press, vol. 24(2), pages 280-297, Summer.
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  11. Ernst Fehr & Simon Gaechter, 1999. "Cooperation and Punishment in Public Goods Experiments," CESifo Working Paper Series 183, CESifo Group Munich.
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  14. Ertan, Arhan & Page, Talbot & Putterman, Louis, 2009. "Who to punish? Individual decisions and majority rule in mitigating the free rider problem," European Economic Review, Elsevier, Elsevier, vol. 53(5), pages 495-511, July.
  15. Visser, Martine & Burns, Justine, 2006. "Bridging the Great Divide in South Africa: Inequality and Punishment in the Provision of Public Goods," Working Papers in Economics, University of Gothenburg, Department of Economics 219, University of Gothenburg, Department of Economics.
  16. Anabela Botelho & Glenn W. Harrison & Lígia Pinto & Elisabet E. Rutstrom, 2005. "Social norms and social choice," NIMA Working Papers, Núcleo de Investigação em Microeconomia Aplicada (NIMA), Universidade do Minho 30, Núcleo de Investigação em Microeconomia Aplicada (NIMA), Universidade do Minho.
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