An Experimental Dynamic Public Goods Game with Carryover
AbstractWe examine voluntary contributions in a two-stage public good experiment with ‘carryover.’ In two treatments, each subject’s second stage endowment is determined by the return from the public good in the first stage. We manipulate payoffs across these treatments so that, relative to our no-carryover baseline, earnings from either Nash play or Pareto Optimal play are held constant. The remaining two treatments maintain a constant endowment in each stage, but vary the marginal per capita return (MPCR) to contributions in the second stage. Our results indicate that carryover increases first stage contributions. Our implementation of carryover enables us to examine the effects of changing endowments and MPCR’s with a wider variety of parameter values than in the existing literature. Consistent with these studies, we find that MPCR and endowment effects are important determinants of subject contributions to the group account. While stage 1 contributions tend to increase in the presence of carryover, efficiency levels across both stages fall relative to the baseline due to the high potential payoffs from complete contribution in the second stage (due to higher endowments or MPCR levels).
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Bibliographic InfoPaper provided by United States Naval Academy Department of Economics in its series Departmental Working Papers with number 32.
Length: 22 pages
Date of creation: Feb 2011
Date of revision:
Other versions of this item:
- Cadigan, John & Wayland, Patrick T. & Schmitt, Pamela & Swope, Kurtis, 2011. "An experimental dynamic public goods game with carryover," Journal of Economic Behavior & Organization, Elsevier, vol. 80(3), pages 523-531.
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-04-02 (All new papers)
- NEP-CBE-2011-04-02 (Cognitive & Behavioural Economics)
- NEP-EXP-2011-04-02 (Experimental Economics)
- NEP-GTH-2011-04-02 (Game Theory)
- NEP-PBE-2011-04-02 (Public Economics)
- NEP-PUB-2011-04-02 (Public Finance)
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