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Voluntary Partnerships for Equally Sharing Contribution Costs: Theoretical Aspects and Experimental Evidence

Author

Listed:
  • Buso Irene Maria

    (Department of Economics, University of Bologna, Bologna, Italy)

  • Di Cagno Daniela

    (Department of Economics and Finance, Luiss University, Rome, Italy)

  • Gueth Werner

    (Max-Planck-Institute for Research on Collective Goods, Bonn, Germany)

  • Spadoni Lorenzo

    (Department of Economics and Law, 18962 University of Cassino and Southern Lazio , Cassino, Italy)

Abstract

We investigate, both theoretically and experimentally, an institutional mechanism designed to enhance cooperation. In this mechanism, contributors have the option to voluntarily contribute to the public good and decide whether to join a (sub)group where partners equally share the contribution cost. Theoretically, stable cost-sharing partnerships enhance efficiency since their partners fully contribute, while outsiders would free-ride. Our data reveal that individual joining and contribution behaviors do not always align with benchmark predictions: partnerships are not always formed, and when they are, they are not always of the optimal size; partners often contribute less than maximally, and outsiders more than minimally. Nonetheless, we document systematic evidence of partnership formation and significantly improved provision of public goods across rounds.

Suggested Citation

  • Buso Irene Maria & Di Cagno Daniela & Gueth Werner & Spadoni Lorenzo, 2025. "Voluntary Partnerships for Equally Sharing Contribution Costs: Theoretical Aspects and Experimental Evidence," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 25(1), pages 1-41.
    • Handle: RePEc:bpj:bejtec:v:25:y:2025:i:1:p:1-41:n:1004
    DOI: 10.1515/bejte-2024-0043
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    More about this item

    Keywords

    public good; group formation; group size; experiments;
    All these keywords.

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation

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