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See no evil: Information chains and reciprocity

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  • Steiger, Eva-Maria
  • Zultan, Ro'i

Abstract

We study experimentally voluntary contributions to public goods when none, some, or all previous decisions are observable. When agents observe previous moves, they tend to condition their cooperation on observed cooperation. This leads to two effects of increased transparency: on the one hand, early movers are more likely to cooperate in order to encourage those who observe them to cooperate. On the other hand, as transparency increases, later movers are less likely to cooperate because they are more likely to observe defections and defect in response. With increasing returns to scale, where the effect of one agent's contribution is larger as more agents contribute, an information chain is as effective in inducing cooperation as full transparency. In a linear public good, where agents lose in monetary terms by contributing to the public good, information chains induce higher cooperation in early movers compared to a no-transparency treatment and in late movers compared to a full-transparency treatment. Thus, partial information can be used to balance the positive and negative effects of transparency.

Suggested Citation

  • Steiger, Eva-Maria & Zultan, Ro'i, 2014. "See no evil: Information chains and reciprocity," Journal of Public Economics, Elsevier, vol. 109(C), pages 1-12.
  • Handle: RePEc:eee:pubeco:v:109:y:2014:i:c:p:1-12
    DOI: 10.1016/j.jpubeco.2013.10.006
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    Cited by:

    1. Leonardo Becchetti & Maurizio Fiaschetti & Francesco Salustri, 2017. "The Impact of Cash Mobs in the Vote with the Wallet Game: Experimental Results," CEIS Research Paper 401, Tor Vergata University, CEIS, revised 18 Apr 2017.
    2. Guidon Fenig & Giovanni Gallipoli & Yoram Halevy, 2018. "Piercing the "Payoff Function" Veil: Tracing Beliefs and Motives," Working Papers tecipa-625, University of Toronto, Department of Economics.
    3. Bernd Irlenbusch & Rainer Michael Rilke & Gari Walkowitz, 2018. "Designing Feedback in Voluntary Contribution Games - The Role of Transparency," WHU Working Paper Series - Economics Group 18-01, WHU - Otto Beisheim School of Management.
    4. Xiaochuan Huang & Takehito Masuda & Yoshitaka Okano & Tatsuyoshi Saijo, 2014. "Cooperation among behaviorally heterogeneous players in social dilemma with stay or leave decisions," Working Papers SDES-2014-7, Kochi University of Technology, School of Economics and Management, revised Feb 2015.
    5. Fenig, Guidon & Gallipoli, Giovanni & Halevy, Yoram, 2015. "Complementarity in the Private Provision of Public Goods by Homo Pecuniarius and Homo Behavioralis," Microeconomics.ca working papers yoram_halevy-2015-21, Vancouver School of Economics, revised 02 May 2016.
    6. Sonntag, Axel & Zizzo, Daniel John, 2017. "Accountability one step removed," Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168235, Verein für Socialpolitik / German Economic Association.

    More about this item

    Keywords

    Public goods; Team production; Incentives; Externality; Information; Transparency; Conditional cooperation;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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