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Heterogeneity and cooperation: The role of capability and valuation on public goods provision

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  • Kölle, Felix

Abstract

We experimentally investigate the effects of two different sources of heterogeneity – capability and valuation – on the provision of public goods when punishment is possible or not. We find that compared to homogeneous groups, asymmetric valuations for the public good have negative effects on cooperation and its enforcement through informal sanctions. Asymmetric capabilities in providing the public good, in contrast, have a positive and stabilizing effect on voluntary contributions. The main reason for these results is the different externalities contributions have on the other group members’ payoffs affecting individuals’ willingness to cooperate. We thus provide evidence that it is not the asymmetric nature of groups per se that facilitates or impedes collective action, but that it is rather the nature of asymmetry that determines the degree of cooperation and the level of public good provision.

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  • Kölle, Felix, 2015. "Heterogeneity and cooperation: The role of capability and valuation on public goods provision," Journal of Economic Behavior & Organization, Elsevier, vol. 109(C), pages 120-134.
  • Handle: RePEc:eee:jeborg:v:109:y:2015:i:c:p:120-134
    DOI: 10.1016/j.jebo.2014.11.009
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    Cited by:

    1. Maertens, Annemie & Michelson, Hope & Nourani, Vesall, 2015. "Cooperative Behavior in Farmer Clubs: Experimental Evidence from Malawi," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205551, Agricultural and Applied Economics Association.
    2. Elena Molis & Levent Neyse & Raul Peña-Fernandez, 2016. "Heterogeneous Returns and Group Formations in the Public Goods Game," ThE Papers 16/02, Department of Economic Theory and Economic History of the University of Granada..

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    Keywords

    Public goods; Heterogeneity; Privileged groups; Inequality; Cooperation; Punishment;

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior

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