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Heterogeneous Social Preferences and the Dynamics of Free Riding in Public Good Experiments

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  • Urs Fischbacher
  • Simon Gaechter

Abstract

We provide a direct test of the role of social preferences and beliefs in voluntary cooperation and its decline. We elicit individuals’ cooperation preference in one experiment and use them – as well as subjects’ elicited beliefs – to make predictions about contributions to a public good played repeatedly. We find substantial heterogeneity in people’s preferences. With simulation methods based on this data, we show that the decline of cooperation is driven by the fact that most people have a preference to contribute less than others. Belief formation and virtual learning do not contribute to the decline of cooperation. Universal free riding is very likely despite the fact that most people are not selfish.

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Bibliographic Info

Paper provided by Thurgauer Wirtschaftsinstitut, Universität Konstanz in its series TWI Research Paper Series with number 27.

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Date of creation: 2008
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Handle: RePEc:twi:respas:0027

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Keywords: Public goods experiments; social preferences; conditional cooperation; free riding;

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Cited by:
  1. Christoph Engel & Bernd Irlenbusch, 2010. "Turning the Lab into Jeremy Bentham’s Panopticon. The Effect of Punishment on Offenders and Non-Offenders," Working Paper Series of the Max Planck Institute for Research on Collective Goods 2010_06, Max Planck Institute for Research on Collective Goods.
  2. John Duffy & Félix Muñoz-García, 2012. "Patience or Fairness? Analyzing Social Preferences in Repeated Games," Games, MDPI, Open Access Journal, vol. 3(1), pages 56-77, March.

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