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Cooperation preferences in the provision of public goods: An experimental study on the effects of social identity

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  • Lankau, Matthias
  • Bicskei, Marianna
  • Bizer, Kilian

Abstract

Traditionally economic theory assumes that preferences are stable facilitating positive predictions of economic policy. While there is conflicting experimental evidence on the temporal stability of cooperation preferences in public goods provision, surprisingly little is known about their stability in different institutional settings. We contribute to this literature by testing whether social identity impacts on cooperation preferences in public goods provision. Specifically, our experiment features a within subject design based on one shot public good games in strategy method, which are carried out in random, in and out group matching protocols. Our findings indicate that cooperation preferences are not stable across these matching circumstances. Quite to the contrary, we find that when matched with in group members, subjects consistently show the preference for higher levels of conditional cooperation and thus less self serving bias than in out group matching. Additionally, while the probability to be a conditional cooperator remains stable under each treatment, we identify an elevated propensity to be a free rider when matched with individuals of a different identity. These results indicate that it can be reasonable to devise policy institutions that strengthen the feeling of belonging to a particular group in order to enhance social welfare. --

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Bibliographic Info

Paper provided by University of Goettingen, Department of Economics in its series Center for European, Governance and Economic Development Research Discussion Papers with number 148.

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Date of creation: 2012
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Handle: RePEc:zbw:cegedp:148

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Keywords: public goods; cooperation preferences; conditional cooperation; free riding; social identity; experimental economics;

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  1. Gary Charness & Luca Rigotti & Aldo Rustichini, 2007. "Individual Behavior and Group Membership," American Economic Review, American Economic Association, American Economic Association, vol. 97(4), pages 1340-1352, September.
  2. Fischbacher, Urs & Gachter, Simon & Fehr, Ernst, 2001. "Are people conditionally cooperative? Evidence from a public goods experiment," Economics Letters, Elsevier, Elsevier, vol. 71(3), pages 397-404, June.
  3. Karla Hoff & Priyanka Pandey, 2006. "Discrimination, Social Identity, and Durable Inequalities," American Economic Review, American Economic Association, American Economic Association, vol. 96(2), pages 206-211, May.
  4. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer, Springer, vol. 10(2), pages 171-178, June.
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  7. Ananish Chaudhuri, 2011. "Sustaining cooperation in laboratory public goods experiments: a selective survey of the literature," Experimental Economics, Springer, Springer, vol. 14(1), pages 47-83, March.
  8. Roberto Burlando & Francesco Guala, 2005. "Heterogeneous Agents in Public Goods Experiments," Experimental Economics, Springer, Springer, vol. 8(1), pages 35-54, April.
  9. Lorenz Goette & David Huffman & Stephan Meier, 2006. "The Impact of Group Membership on Cooperation and Norm Enforcement: Evidence Using Random Assignment to Real Social Groups," American Economic Review, American Economic Association, American Economic Association, vol. 96(2), pages 212-216, May.
  10. Ernst Fehr & Urs Fischbacher, 2002. "Why Social Preferences Matter -- The Impact of Non-Selfish Motives on Competition, Cooperation and Incentives," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 112(478), pages C1-C33, March.
  11. Solow, John L. & Kirkwood, Nicole, 2002. "Group identity and gender in public goods experiments," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 48(4), pages 403-412, August.
  12. Urs Fischbacher & Simon Gaechter, 2009. "Social Preferences, Beliefs, and the Dynamics of Free Riding in Public Good Experiments," Discussion Papers, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham 2009-04, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
  13. Sergio Currarini & Friederike Menge, 2012. "Identity, Homophily and In-Group Bias," Working Papers, Fondazione Eni Enrico Mattei 2012.37, Fondazione Eni Enrico Mattei.
  14. Eckel, Catherine C. & Grossman, Philip J., 2005. "Managing diversity by creating team identity," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 58(3), pages 371-392, November.
  15. Blanco, Mariana & Engelmann, Dirk & Normann, Hans Theo, 2011. "A within-subject analysis of other-regarding preferences," Games and Economic Behavior, Elsevier, Elsevier, vol. 72(2), pages 321-338, June.
  16. Jeanette Brosig & Thomas Riechmann & Joachim Weimann, 2007. "Selfish in the end? An investigation of consistency and stability of individual behaviour," FEMM Working Papers 07005, Otto-von-Guericke University Magdeburg, Faculty of Economics and Management.
  17. Yan Chen & Sherry Xin Li, 2009. "Group Identity and Social Preferences," American Economic Review, American Economic Association, American Economic Association, vol. 99(1), pages 431-57, March.
  18. Volk, Stefan & Thoeni, Christian & Ruigrok, Winfried, 2011. "Temporal stability and psychological foundations of cooperation preferences," Economics Working Paper Series, University of St. Gallen, School of Economics and Political Science 1101, University of St. Gallen, School of Economics and Political Science.
  19. McLeish, Kendra N. & Oxoby, Robert J., 2007. "Identity, Cooperation, and Punishment," IZA Discussion Papers 2572, Institute for the Study of Labor (IZA).
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