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Heterogeneous Reactions to Heterogeneity in Returns from Public Goods

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  • Urs Fischbacher
  • Sabrina Teyssier
  • Simeon Schudy

Abstract

In many cases individuals benefit differently from the provision of a public good. We study in a laboratory experiment how heterogeneity in returns and uncertainty affects unconditional and conditional contribution behavior in a linear public goods game. The elicitation of conditional contributions in combination with a within subject design allows us to investigate belief-independent and type-specific reactions to heterogeneity. We find that, on average, heterogeneity in returns decreases unconditional contributions but does not affects conditional contributions only weakly. Uncertainty in addition to heterogeneity reduces conditional contributions slightly. Individual reactions to heterogeneity differ systematically. Selfish subjects and one third of conditional cooperators do not react to heterogeneity whereas the reactions of the remaining conditional cooperators vary. A substantial part of heterogeneity in reactions can be explained by inequity aversion which accounts for different reference groups subjects compare to.

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Paper provided by Thurgauer Wirtschaftsinstitut, Universität Konstanz in its series TWI Research Paper Series with number 73.

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Date of creation: 2012
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Handle: RePEc:twi:respas:0073

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Keywords: public goods; social preferences; conditional cooperation; heterogeneity;

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Cited by:
  1. Esther Blanco & Maria Claudia Lopez & James M. Walker, 2013. "Tensions Between the Resource Damage and the Private Benefits of Appropriation in the Commons," Working Papers 2013-02, Faculty of Economics and Statistics, University of Innsbruck.
  2. Esther Blanco & Maria Claudia Lopez & James M. Walker, 2012. "The opportunity costs of conservation with deterministic and probabilistic degradation externalities," Working Papers 2012-25, Faculty of Economics and Statistics, University of Innsbruck.
  3. Edward J Cartwright & Denise Lovett, 2013. "Leadership and conditional cooperation in public good games: What difference does the game make?," Studies in Economics, Department of Economics, University of Kent 1324, Department of Economics, University of Kent.

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