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An Experimental Investigation of Excludable Public Goods

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  • Kurtis Swope

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Abstract

This paper extends the research on incentive compatible institutions for the provision of public goods by imposing a minimum contribution that must be met in order for an individual to enjoy the benefits of the public good. Excluding individuals who do not contribute at least the minimum transforms the linear n-player pure public goods game to an n-player coordination game with multiple, Pareto-ranked Nash equilibria. The experimental results show that exclusion increases contributions to the public good in most cases. However, an increase in contributions may not be sufficient to increase social welfare because there is a welfare cost to excluding individuals when the good is non-rival. Furthermore, exclusion can decrease both contributions and welfare in environments in which individuals fail to coordinate their contributions. The results are sensitive to the minimum contribution requirement and to the relative returns from the public and private alternatives. Copyright Kluwer Academic Publishers 2002

Suggested Citation

  • Kurtis Swope, 2002. "An Experimental Investigation of Excludable Public Goods," Experimental Economics, Springer;Economic Science Association, vol. 5(3), pages 209-222, December.
  • Handle: RePEc:kap:expeco:v:5:y:2002:i:3:p:209-222 DOI: 10.1023/A:1020880101987
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    References listed on IDEAS

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    1. Palfrey, Thomas R. & Rosenthal, Howard, 1984. "Participation and the provision of discrete public goods: a strategic analysis," Journal of Public Economics, Elsevier, pages 171-193.
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    6. Palfrey, Thomas R. & Rosenthal, Howard, 1984. "Participation and the provision of discrete public goods: a strategic analysis," Journal of Public Economics, Elsevier, pages 171-193.
    7. Laury, Susan K. & Holt, Charles A., 2008. "Voluntary Provision of Public Goods: Experimental Results with Interior Nash Equilibria," Handbook of Experimental Economics Results, Elsevier.
    8. Palfrey, Thomas R & Prisbrey, Jeffrey E, 1997. "Anomalous Behavior in Public Goods Experiments: How Much and Why?," American Economic Review, American Economic Association, pages 829-846.
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    Cited by:

    1. Martin Sefton & Robert Shupp & James M. Walker, 2007. "The Effect Of Rewards And Sanctions In Provision Of Public Goods," Economic Inquiry, Western Economic Association International, vol. 45(4), pages 671-690, October.
    2. Surajeet Chakravarty & Miguel A. Fonseca, 2013. "Discrimination via Exclusion: An Experiment on Group Identity and Club Goods," Discussion Papers 1302, Exeter University, Department of Economics.
    3. Maier-Rigaud, Frank P. & Martinsson, Peter & Staffiero, Gianandrea, 2010. "Ostracism and the provision of a public good: experimental evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 73(3), pages 387-395, March.
    4. Matthew Ellman & Sjaak Hurkens, 2014. "Optimal Crowdfunding Design," Working Papers 14-21, NET Institute.
    5. Cox, Caleb A., 2015. "Cursed beliefs with common-value public goods," Journal of Public Economics, Elsevier, pages 52-65.
    6. Jason A. Aimone & Laurence R. Iannaccone & Michael D. Makowsky & Jared Rubin, 2013. "Endogenous Group Formation via Unproductive Costs," Review of Economic Studies, Oxford University Press, vol. 80(4), pages 1215-1236.
    7. Cox, Caleb, 2014. "Cursed beliefs with common-value public goods," MPRA Paper 53074, University Library of Munich, Germany.
    8. Judd B. Kessler & Alvin E. Roth, 2012. "Organ Allocation Policy and the Decision to Donate," American Economic Review, American Economic Association, pages 2018-2047.
    9. Bchir, Mohamed Ali, 2014. "From the lab to the field: An experimental investigation of the provision of a club good," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 51(C), pages 57-67.
    10. Mohamed Ali Bchir & Marc Willinger, 2009. "Do clubs foster provision success ?," Working Papers 09-19, LAMETA, Universtiy of Montpellier, revised Dec 2009.
    11. Mohamed Bchir & Marc Willinger, 2013. "Does a membership fee foster successful public good provision? An experimental investigation of the provision of a step-level collective good," Public Choice, Springer, vol. 157(1), pages 25-39, October.
    12. Saldarriaga-Isaza, Adrián & Villegas-Palacio, Clara & Arango, Santiago, 2015. "Phasing out mercury through collective action in artisanal gold mining: Evidence from a framed field experiment," Ecological Economics, Elsevier, vol. 120(C), pages 406-415.
    13. Croson, Rachel & Fatas, Enrique & Neugebauer, Tibor & Morales, Antonio J., 2015. "Excludability: A laboratory study on forced ranking in team production," Journal of Economic Behavior & Organization, Elsevier, vol. 114(C), pages 13-26.

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    Keywords

    public goods; coordination; experiments;

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