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The Dynamic Free Rider Problem: A Laboratory Study

Listed author(s):
  • Marco Battaglini
  • Salvatore Nunnari
  • Thomas R. Palfrey

We report the results of an experiment that investigates free riding in the accumulation of durable public goods. We consider economies with reversibility, where contributions can be positive or negative; and economies with irreversibility, where contributions are nonnegative. Aggregate outcomes support the qualitative predictions of the Markov Perfect Equilibria (MPE) characterized in Battaglini, Nunnari, and Palfrey (2014): steady state levels of public good are lower with reversibility than irreversibility; accumulation is inefficiently slow; and the public good is under-provided in both regimes. On the other hand, public good levels are higher than MPE, and some evidence of history dependence is detected.

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Article provided by American Economic Association in its journal American Economic Journal: Microeconomics.

Volume (Year): 8 (2016)
Issue (Month): 4 (November)
Pages: 268-308

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Handle: RePEc:aea:aejmic:v:8:y:2016:i:4:p:268-308
Note: DOI: 10.1257/mic.20150126
Contact details of provider: Web page: https://www.aeaweb.org/aej-micro
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