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The Voluntary Provision of a Pure Public Good with Diminishing Marginal Returns

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  • Laury, Susan K
  • Walker, James M
  • Williams, Arlington W

Abstract

In experiments investigating the voluntary provision of a pure public good, participants consistently allocate resources to this good when the Nash prediction is to allocate nothing. This paper explores the robustness of this result when the Nash prediction calls for a division of resources between the private and public goods. The authors consider how a change in individual resource endowments and supplemental earnings information affect allocations to the public good. Results indicate that, under both the high and low endowment conditions, groups continue to allocate more resources than the Nash prediction. However, providing participants with detailed instructions that describe the declining marginal benefit to the public good leads to a significant decrease in allocations to the public good. Copyright 1999 by Kluwer Academic Publishers

Suggested Citation

  • Laury, Susan K & Walker, James M & Williams, Arlington W, 1999. "The Voluntary Provision of a Pure Public Good with Diminishing Marginal Returns," Public Choice, Springer, vol. 99(1-2), pages 139-160, April.
    • Handle: RePEc:kap:pubcho:v:99:y:1999:i:1-2:p:139-60
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    Cited by:

    1. Francisco Cabo & Mabel Tidball & Alain Jean-Marie, 2023. "Positional and conformist effects in public good provision. Strategic interaction and inertia," Working Papers hal-04147447, HAL.
    2. Martin Beckenkamp, 2006. "A game-theoretic taxonomy of social dilemmas," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 14(3), pages 337-353, September.
    3. Bruttel, Lisa & Friehe, Tim, 2014. "Can short-term incentives induce long-lasting cooperation? Results from a public-goods experiment," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 53(C), pages 120-130.
    4. Frank P. Maier-Rigaud & Jose Apesteguia, 2004. "The Role of Rivalry. Public Goods versus Common-Pool Resources," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2004_2, Max Planck Institute for Research on Collective Goods.
    5. Jose Apesteguia & Frank P. Maier-Rigaud, 2006. "The Role of Rivalry," Journal of Conflict Resolution, Peace Science Society (International), vol. 50(5), pages 646-663, October.
    6. Feng, Jun & Saijo, Tatsuyoshi & Shen, Junyi & Qin, Xiangdong, 2018. "Instability in the voluntary contribution mechanism with a quasi-linear payoff function: An experimental analysis," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 72(C), pages 67-77.
    7. Jonathan Maurice & Agathe Rouaix & Marc Willinger, 2013. "Income Redistribution And Public Good Provision: An Experiment," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 54(3), pages 957-975, August.
    8. Cadigan, John & Wayland, Patrick T. & Schmitt, Pamela & Swope, Kurtis, 2011. "An experimental dynamic public goods game with carryover," Journal of Economic Behavior & Organization, Elsevier, vol. 80(3), pages 523-531.
    9. Seely, Beth & Van Huyck, John & Battalio, Raymond, 2005. "Credible assignments can improve efficiency in laboratory public goods games," Journal of Public Economics, Elsevier, vol. 89(8), pages 1437-1455, August.
    10. Mathieu Désolé & Stefano Farolfi & Patrick Rio, 2012. "How does context influence players’ behaviour ? Experimental assessment in a 3-player coordination problem," Working Papers 12-36, LAMETA, Universtiy of Montpellier, revised Dec 2012.
    11. Tatsuyoshi Saijo, 2014. "The instability of the voluntary contribution mechanism," Working Papers SDES-2014-3, Kochi University of Technology, School of Economics and Management, revised Oct 2014.
    12. Wooyoung Lim & Pengfei Zhang, 2020. "Herd immunity and a vaccination game: An experimental study," PLOS ONE, Public Library of Science, vol. 15(5), pages 1-16, May.
    13. Takehisa Kumakawa & Tatsuyoshi Saijo & Takehiko Yamato, 2015. "Isolating and identifying motivations: A voluntary contribution mechanism experiment with interior Nash equilibria," Working Papers SDES-2015-16, Kochi University of Technology, School of Economics and Management, revised Mar 2015.
    14. Kameda, Tatsuya & Tsukasaki, Takafumi & Hastie, Reid & Berg, Nathan, 2010. "Democracy under uncertainty: The ‘wisdom of crowds’ and the free-rider problem in group decision making," MPRA Paper 26584, University Library of Munich, Germany.
    15. R. Isaac & James Walker, 1998. "Nash as an Organizing Principle in the Voluntary Provision of Public Goods: Experimental Evidence," Experimental Economics, Springer;Economic Science Association, vol. 1(3), pages 191-206, December.
    16. Tatsuyoshi Saijo, 2015. "The sandwich property in the voluntary contribution mechanism:The instability approach," Working Papers SDES-2015-13, Kochi University of Technology, School of Economics and Management, revised Mar 2015.
    17. Kingsley, David C., 2016. "Endowment heterogeneity and peer punishment in a public good experiment: Cooperation and normative conflict," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 60(C), pages 49-61.
    18. Brañas-Garza, Pablo & Molis, Elena & Neyse, Levent, 2021. "Exposure to inequality may cause under-provision of public goods: Experimental evidence," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 92(C).
    19. Carmela Di Mauro & Massimo Finocchiaro Castro, 2011. "Kindness, confusion, or … ambiguity?," Experimental Economics, Springer;Economic Science Association, vol. 14(4), pages 611-633, November.
    20. Kingsley, David C. & Liu, Benyuan, 2014. "Cooperation across payoff equivalent public good and common pool resource experiments," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 51(C), pages 79-84.
    21. Kim, Duk Gyoo, 2018. "Population uncertainty in voluntary contributions of public goods," Journal of Economic Behavior & Organization, Elsevier, vol. 145(C), pages 218-231.

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