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‘Expressive’ obligations in public good games: Crowding-in and crowding-out effects

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  • Bernasconi, Michele
  • Corazzini, Luca
  • Marenzi, Anna

Abstract

We study individual contributions in a repeated linear public good experiment in which, in each period, subjects are required to contribute a minimum amount and face a certain probability of being audited. Audited subjects who contribute less than the required amount are convicted to pay the difference between the obligation and the voluntary contribution. We investigate the ‘expressive’ force of the obligations. While at early stages subjects contribute the minimum level, with repetition contributions decline below the required amount. We observe that expressive obligations exert a rather robust crowding-out effect on voluntary contributions as compared to a linear public good game. Crowding-out is stronger when payments collected through the auditing procedure are distributed to subjects rather than when they are a deadweight loss.

Suggested Citation

  • Bernasconi, Michele & Corazzini, Luca & Marenzi, Anna, 2013. "‘Expressive’ obligations in public good games: Crowding-in and crowding-out effects," Research in Economics, Elsevier, vol. 67(1), pages 13-24.
    • Handle: RePEc:eee:reecon:v:67:y:2013:i:1:p:13-24
    DOI: 10.1016/j.rie.2012.09.004
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    2. Theodore Eisenberg & Christoph Engel, 2014. "Assuring Civil Damages Adequately Deter: A Public Good Experiment," Journal of Empirical Legal Studies, John Wiley & Sons, vol. 11(2), pages 301-349, June.
    3. Onderstal, Sander & Schram, Arthur J.H.C. & Soetevent, Adriaan R., 2013. "Bidding to give in the field," Journal of Public Economics, Elsevier, vol. 105(C), pages 72-85.
    4. Luca Corazzini, Marcelo Tyszler, 2010. "Love for Efficiency or Confusion? A QRE Analysis of Individual Contributions in a Public Good Game," ISLA Working Papers 37, ISLA, Centre for research on Latin American Studies and Transition Economies, Universita' Bocconi, Milano, Italy.
    5. Renate Buijze & Christoph Engel & Sigrid Hemels, 2015. "Insuring Your Donation – An Experiment," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2015_16, Max Planck Institute for Research on Collective Goods, revised Jul 2016.

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