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Provision of Multilevel Public Goods by Positive Externalities: Experimental Evidence

Listed author(s):
  • Güth Werner

    ()

    (Max Planck Institute of Economics, Strategic Interaction Group)

  • Sääksvuori Lauri

    ()

    (Max Planck Institute of Economics, Strategic Interaction group)

The provision of public goods regularly embodies interrelated spheres of influence on multiple scales. This article examines the nature of human behavior in a multilevel social dilemma game with positive provision externalities to local and global scales. We report experimental results showing that behavior in multilevel games is strongly driven by asymmetric conditional cooperation prioritizing local level externalities. Our findings demonstrate how individuals over time adjust their behavior to local conditions. We do not find significant adjustment to global group average, suggesting that the local group creates a salient reference group for social comparisons in multilevel public goods provision. Our results emphasize the importance of strong local level commitment when designing institutions to promote sustainable provision of globally important public goods like the global climate.

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Article provided by De Gruyter in its journal The B.E. Journal of Economic Analysis & Policy.

Volume (Year): 12 (2012)
Issue (Month): 1 (July)
Pages: 1-33

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Handle: RePEc:bpj:bejeap:v:12:y:2012:i:1:n:28
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