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Endogenous Move Structure and Voluntary Provision of Public Goods: Theory and Experiment

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  • DANIELE NOSENZO
  • MARTIN SEFTON

Abstract

In this paper we examine voluntary contributions to a public good when the timing of contributions is endogenously determined by contributors, focusing on the simple quasi-linear setting with two players (Varian, 1994). We show that the move order that is predicted to emerge is sensitive to how commitment opportunities are modeled. We show that a favorable move order is predicted to emerge in Hamilton and Slutsky's (1990) "observable delay" extended game, but a detrimental move order is predicted to emerge in their "action commitment" extended game. We then report a laboratory experiment designed to examine whether the predicted move ordering emerges, and how this impacts overall contributions, in these extended games. The results are similar in both extended games. We find that when the detrimental move order is observed, contributions are indeed lower, as predicted. However, this detrimental move order is seldom observed. Instead of committing to low contributions, players tend to avoid making a commitment. These experimental results on timing decisions suggest that commitment opportunities may be less damaging to public good provision than previously thought.
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Suggested Citation

  • Daniele Nosenzo & Martin Sefton, 2011. "Endogenous Move Structure and Voluntary Provision of Public Goods: Theory and Experiment," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 13(5), pages 721-754, October.
    • Handle: RePEc:bla:jpbect:v:13:y:2011:i:5:p:721-754
    DOI: j.1467-9779.2011.01518.x
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    File URL: http://hdl.handle.net/10.1111/j.1467-9779.2011.01518.x
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    Cited by:

    1. Kaplan, Todd R. & Ruffle, Bradley J. & Shtudiner, Zeev, 2018. "Cooperation through coordination in two stages," Journal of Economic Behavior & Organization, Elsevier, vol. 154(C), pages 206-219.
    2. Kleine, Fabian & Königstein, Manfred & Rozsnyói, Balázs, 2014. "Voluntary leadership in an experimental trust game," Journal of Economic Behavior & Organization, Elsevier, vol. 108(C), pages 442-452.
    3. Schwerhoff, Gregor, 2013. "Leadership and International Climate Cooperation," Climate Change and Sustainable Development 162380, Fondazione Eni Enrico Mattei (FEEM).
    4. Gächter, Simon & Nosenzo, Daniele & Renner, Elke & Sefton, Martin, 2010. "Sequential vs. simultaneous contributions to public goods: Experimental evidence," Journal of Public Economics, Elsevier, vol. 94(7-8), pages 515-522, August.
    5. Riyanto, Yohanes E. & Roy, Nilanjan, 2017. "It's your turn: experiments with three-player public good games," MPRA Paper 76565, University Library of Munich, Germany.
    6. Kim, Jaesoo, 2012. "Endogenous leadership in incentive contracts," Journal of Economic Behavior & Organization, Elsevier, vol. 82(1), pages 256-266.
    7. Arturo García & Mariel Leal & Sang-Ho Lee, 2019. "Endogenous Timing with a Socially Responsible Firm," Korean Economic Review, Korean Economic Association, vol. 35, pages 345-370.
    8. Roi Zultan & Eva-Maria Steiger, 2011. "See No Evil: Information Chains and Reciprocity in Teams," Working Papers 1108, Ben-Gurion University of the Negev, Department of Economics.
    9. Simon Gaechter & Daniele Nosenzo & Elke Renner & Martin Sefton, 2009. "Sequential versus simultaneous contributions to public goods: Experimental evidence," Discussion Papers 2009-07, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    10. Edward Cartwright & Michalis Drouvelis, 2024. "Social framing effects in leadership by example: Preferences or beliefs?," Economic Inquiry, Western Economic Association International, vol. 62(4), pages 1629-1651, October.
    11. Marie Claire Villeval, 2012. "Contribution au bien public et préférences sociales : Apports récents de l'économie comportementale," Post-Print halshs-00681348, HAL.
    12. Wolfgang Buchholz & Todd Sandler, 2017. "Successful Leadership in Global Public Good Provision: Incorporating Behavioural Approaches," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 67(3), pages 591-607, July.
    13. Fabian Kleine & Manfred Königstein & Balázs Rozsnyói, 2018. "Voluntary Leadership and Asymmetric Endowments in the Investment Game," Games, MDPI, vol. 9(3), pages 1-21, July.
    14. Miguel A. Fonseca, 2019. "Endogenous Price Leadership with Asymmetric Costs: Experimental Evidence," Studies in Microeconomics, , vol. 7(1), pages 59-74, June.
    15. Jing Yu & Martin G. Kocher, 2023. "Leading by example in a public goods experiment with benefit heterogeneity," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 61(3), pages 685-712, October.
    16. Lowen, Aaron & Schmitt, Pamela, 2013. "Cooperation limitations under a one-time threat of expulsion and punishment," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 44(C), pages 68-74.
    17. Jun‐ichi Itaya & Atsue Mizushima & Kengo Kurosaka, 2023. "Endogenous timing and income inequality in the voluntary provision of public goods: Theory and experiment," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 56(4), pages 1347-1376, November.
    18. Emrah Arbak & Marie Claire Villeval, 2013. "Voluntary Leadership: Selection and Influence," Post-Print halshs-00664830, HAL.
    19. Steiger, Eva-Maria & Zultan, Ro'i, 2014. "See no evil: Information chains and reciprocity," Journal of Public Economics, Elsevier, vol. 109(C), pages 1-12.
    20. Jun-ichi Itaya & Atsue Mizushima & Kengo Kurosaka, 2018. "Endogenous Timing and Income Inequality in the Voluntary Provision of Public Goods: Theory and Experiment," CESifo Working Paper Series 7441, CESifo.
    21. Emrah Arbak & Marie-Claire Villeval, 2013. "Voluntary leadership: motivation and influence," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 40(3), pages 635-662, March.
    22. Riyanto, Yohanes E. & Roy, Nilanjan, 2019. "Path of intertemporal cooperation and limits to turn-taking behavior," Journal of Economic Behavior & Organization, Elsevier, vol. 165(C), pages 21-36.

    More about this item

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior

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