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Step-Level Public Goods: Experimental Evidence

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  • Rau, Holger Andreas
  • Normann, Hans-Theo

Abstract

We analyze the provision of a step-level public good in an experiment. Specifically, we investigate how the order of moves and the introduction of a second step-level affects public-good provision. We find that the sequential-move game improves public-good provision and payoffs. An additional step-level does lead to higher contributions but the effect on public-good provision is ambiguous and insignificant. Based on an existing data set, we calibrate Fehr and Schmidt's (1999) model of inequality aversion and find that actual behavior fits remarkably well with these predictions in a quantitative sense, but there are also two contradictions to the model's predictions. --

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Bibliographic Info

Paper provided by Verein für Socialpolitik / German Economic Association in its series Annual Conference 2011 (Frankfurt, Main): The Order of the World Economy - Lessons from the Crisis with number 48710.

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Date of creation: 2011
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Handle: RePEc:zbw:vfsc11:48710

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Web page: http://www.socialpolitik.org/
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Keywords: Experimental economics; sequential play; step-level public good;

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