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Belief heterogeneity and contributions decay among conditional cooperators in public goods games

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  • Chaudhuri, Ananish
  • Paichayontvijit, Tirnud
  • Smith, Alexander

Abstract

It is well-established that in finitely repeated linear public goods games, contributions decay over time with increasing free-riding. Prior researchers have appealed to notions of conditional cooperation coupled with self-interest to explain this phenomenon. We explore a complementary explanation for contributions falling over time. We show that there can be considerable heterogeneity in the distribution of initial beliefs among conditional cooperators, with subjects holding either optimistic or pessimistic beliefs regarding their peers’ cooperativeness. Therefore, what is often perceived as purely self-regarding behavior may well be “conditional free-riding” by pessimistic reciprocators. These differences in prior beliefs, and subjects’ contribution choices in response to those differing priors, can also generate a process of decay over and above self-serving biases or the interaction between reciprocators and free-riders.

Suggested Citation

  • Chaudhuri, Ananish & Paichayontvijit, Tirnud & Smith, Alexander, 2017. "Belief heterogeneity and contributions decay among conditional cooperators in public goods games," Journal of Economic Psychology, Elsevier, vol. 58(C), pages 15-30.
    • Handle: RePEc:eee:joepsy:v:58:y:2017:i:c:p:15-30
    DOI: 10.1016/j.joep.2016.11.004
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    2. Liu, Jia & Sonntag, Axel & Zizzo, Daniel John, 2022. "Information defaults in repeated public good provision," Journal of Economic Behavior & Organization, Elsevier, vol. 197(C), pages 356-369.
    3. Salazar, Miguel & Joel Shaw, Daniel & Czekóová, Kristína & Staněk, Rostislav & Brázdil, Milan, 2022. "The role of generalised reciprocity and reciprocal tendencies in the emergence of cooperative group norms," Journal of Economic Psychology, Elsevier, vol. 90(C).
    4. Ortiz-Riomalo, Juan Felipe & Koessler, Ann-Kathrin & Engel, Stefanie, 2022. "Fostering co-operation through participation in natural resource management. An integrative review," EconStor Preprints 253261, ZBW - Leibniz Information Centre for Economics.
    5. Eugen Dimant & Michele Gelfand & Anna Hochleitner & Silvia Sonderegger, 2022. "Strategic Behavior with Tight, Loose and Polarized Norms," ECONtribute Discussion Papers Series 198, University of Bonn and University of Cologne, Germany.
    6. Masaki Aoyagi & Guillaume Frechette & Sevgi Yuksel, 2021. "Beliefs in Repeated Games," ISER Discussion Paper 1119r, Institute of Social and Economic Research, Osaka University, revised Nov 2021.
    7. Martinangeli, Andrea F.M., 2021. "Do what (you think) the rich will do: Inequality and belief heterogeneity in public good provision," Journal of Economic Psychology, Elsevier, vol. 83(C).
    8. Ananish Chaudhuri, 2018. "Belief Heterogeneity and the Restart Effect in a Public Goods Game," Games, MDPI, vol. 9(4), pages 1-20, November.
    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. Nisvan Erkal & Boon Han Koh & Nguyen Lam, 2023. "Using Milestones as a Source of Feedback in Teamwork: Insights from a Dynamic Voluntary Contribution Mechanism," Discussion Papers 2310, University of Exeter, Department of Economics.
    11. Eugen Dimant & Michele Gelfand & Anna Hochleitner & Silvia Sonderegger, 2023. "Strategic Behavior with Tight, Loose and Polarized Norms," CESifo Working Paper Series 10233, CESifo.
    12. Masaki Aoyagi & Guillaume Frechette & Sevgi Yuksel, 2021. "Beliefs in Repeated Games," ISER Discussion Paper 1119, Institute of Social and Economic Research, Osaka University.
    13. Zhang, Huanren, 2019. "Common fate motivates cooperation: The influence of risks on contributions to public goods," Journal of Economic Psychology, Elsevier, vol. 70(C), pages 12-21.

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    More about this item

    Keywords

    Experiments; Public goods; Voluntary contributions; Beliefs; Feedback;
    All these keywords.

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior

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