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A veil of ignorance: uncertain and ambiguous individual productivity supports stable contributions to a public good

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Abstract

The linear public goods game with a voluntary contribution mechanism (VCM) has a large literature providing many insights for the field. Recent papers have investigated impacts on contributions of heterogeneity, risk and ambiguity in marginal per capita return (MPCR) from the public good. We investigate a neglected, but highly relevant set up. In our experiment, the voluntary contribution of one individual to the public good may be more/less productive than another, and this productivity may be uncertain or ambiguous. We have four treatments: HOMOGENOUS (all members of the fixed groups of four are of equal productivity), CERTAIN (two high productivity, two low, but randomly switching in future periods), UNCERTAIN (each subject has a 50-50 lottery of being high or low productivity) and AMBIGUOUS (each subject has an unknown probability of being high or low). High productivity subjects contribute more in the CERTAIN treatment. We find contribution levels are stable in the three treatments over the 10 periods, whereas contributions in the HOMOGENOUS control decline as per the standard finding in a public goods game. These results suggest a natural veil of ignorance about current or future individual productivity, and a social norm of the highly productive contributing more, support a more stable level of contributions over time. Our results are relevant to many field examples, such as contributing to the public good by wearing a face mask in a pandemic, given it is uncertain/ambiguous whether the wearer is contagious (high productivity) or not (low productivity).

Suggested Citation

  • Zack Dorner & Steven Tucker & Gazi Hassan, 2021. "A veil of ignorance: uncertain and ambiguous individual productivity supports stable contributions to a public good," Working Papers in Economics 21/01, University of Waikato.
  • Handle: RePEc:wai:econwp:21/01
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    File URL: https://repec.its.waikato.ac.nz/wai/econwp/2101.pdf
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    References listed on IDEAS

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    Cited by:

    1. Caleb Cox & Brock Stoddard, 2023. "Inequality and the Allocation of Collective Goods," Working Papers 23-10, Department of Economics, Appalachian State University.

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    More about this item

    Keywords

    ambiguity; heterogeneous productivity; public goods game; social norms; uncertainty; voluntary contribution mechanism;
    All these keywords.

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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