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Reputation in a public goods game: Taking the design of credit bureaus to the lab

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  • McIntosh, Craig
  • Sadoulet, Elisabeth
  • Buck, Steven
  • Rosada, Tomas

Abstract

We present the results of a new laboratory experiment designed to mimic the ways in which credit bureaus will alter microfinance markets. Where loans are taken in groups, bureaus can build reputations for borrowers at the group or the individual level, and the optimal contract is not obvious. In a modified public goods game with ejection and re-assignment played by Guatemalan micro-entrepreneurs, we find the use of group reputation to be effective in increasing contributions. Given the costs of transitioning microfinance bureaus to the sharing of individual information, our results suggest that this change would not be cost effective.

Suggested Citation

  • McIntosh, Craig & Sadoulet, Elisabeth & Buck, Steven & Rosada, Tomas, 2013. "Reputation in a public goods game: Taking the design of credit bureaus to the lab," Journal of Economic Behavior & Organization, Elsevier, vol. 95(C), pages 270-285.
    • Handle: RePEc:eee:jeborg:v:95:y:2013:i:c:p:270-285
    DOI: 10.1016/j.jebo.2012.09.013
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    3. Qinghu Liao & Wenwen Dong & Boxin Zhao, 2023. "A New Strategy to Solve “the Tragedy of the Commons” in Sustainable Grassland Ecological Compensation: Experience from Inner Mongolia, China," Sustainability, MDPI, vol. 15(12), pages 1-24, June.
    4. Lu, Peng, 2015. "Individual choice and reputation distribution of cooperative behaviors among heterogeneous groups," Chaos, Solitons & Fractals, Elsevier, vol. 77(C), pages 39-46.
    5. Lu, Peng & Wang, Fang, 2015. "Heterogeneity of inferring reputation probability in cooperative behaviors for the spatial prisoners’ dilemma game," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 433(C), pages 367-378.
    6. Jonathan DE QUIDT & Maitreesh GHATAK, 2018. "Is The Credit Worth It? For-Profit Lenders In Microfinance With Rational And Behavioral Borrowers," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 89(1), pages 175-199, March.
    7. Greiff, Matthias & Paetzel, Fabian, 2020. "Information about average evaluations spurs cooperation: An experiment on noisy reputation systems," Journal of Economic Behavior & Organization, Elsevier, vol. 180(C), pages 334-356.
    8. Lu, Peng, 2015. "Learn good from bad: Effects of good and bad neighbors in spatial prisoners’ dilemma games," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 436(C), pages 351-358.
    9. Zhenghong Wu & Huan Huang & Qinghu Liao, 2021. "The study on the role of dedicators on promoting cooperation in public goods game," PLOS ONE, Public Library of Science, vol. 16(9), pages 1-17, September.
    10. Chen, Qiao & Chen, Tong & Wang, Yongjie, 2017. "Publishing the donation list incompletely promotes the emergence of cooperation in public goods game," Applied Mathematics and Computation, Elsevier, vol. 310(C), pages 48-56.
    11. Lu, Peng, 2015. "Imitating winner or sympathizing loser? Quadratic effects on cooperative behavior in prisoners’ dilemma games," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 436(C), pages 327-337.
    12. Peng Lu & Xiaoping Zheng, 2015. "Social Stratification and Cooperative Behavior in Spatial Prisoners' Dilemma Games," PLOS ONE, Public Library of Science, vol. 10(7), pages 1-16, July.

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    More about this item

    Keywords

    Information; Reputation; Public goods; Credit bureaus; Microfinance;
    All these keywords.

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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