IDEAS home Printed from https://ideas.repec.org/a/oup/ecinqu/v41y2003i4p574-591.html

Asset Markets and Equilibrium Selection in Public Goods Games with Provision Points: An Experimental Study

Author

Listed:
  • Bruno Broseta
  • Enrique Fatas
  • Tibor Neugebauer

Abstract

We report experimental results on the effects that auctioning the right to play a public goods game with a provision point may have on equilibrium selection and individual behavior. Auctioning off such a right among a larger population of players strikingly enhances public good provision. Once public good provision is obtained, the auction price at the preliminary stage increases to its upper limit, dissipating all players' gains associated with the provision of the public good. Individual deviations from the equilibrium strategy are neither able to force lower market prices nor to affect provision of the public good in subsequent periods. (JEL C72, C92, H41) Copyright 2003, Oxford University Press.

Suggested Citation

  • Bruno Broseta & Enrique Fatas & Tibor Neugebauer, 2003. "Asset Markets and Equilibrium Selection in Public Goods Games with Provision Points: An Experimental Study," Economic Inquiry, Western Economic Association International, vol. 41(4), pages 574-591, October.
    • Handle: RePEc:oup:ecinqu:v:41:y:2003:i:4:p:574-591
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1093/ei/cbg029
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or

    for a different version of it.

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. A. Arrighetti & S. Curatolo, 2010. "Opportunismo e coordinamento: soluzioni regolative e istituzionali," Economics Department Working Papers 2010-EP02, Department of Economics, Parma University (Italy).
    2. Jordi Brandts & Antonio Cabrales & Gary Charness, 2007. "Forward induction and entry deterrence: an experiment," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 33(1), pages 183-209, October.
    3. Antonio J. Morales & Javier Rodero-Cosano, 2023. "Forward induction and market entry with an endogenous outside option," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 61(2), pages 365-383, August.
    4. Jia Liu & Yohanes E. Riyanto, 2017. "The limit to behavioral inertia and the power of default in voluntary contribution games," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 48(4), pages 815-835, April.
    5. Rachel Croson & Enrique Fatas & Tibor Neugebauer, 2006. "An Experimental Analysis Of Conditional Cooperation," Working Papers. Serie AD 2006-24, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    6. Choo, Lawrence & Zhou, Xiaoyu, 2019. "Can market competition reduce anomalous behaviours," FAU Discussion Papers in Economics 08/2019, Friedrich-Alexander University Erlangen-Nuremberg, Institute for Economics.
    7. Jason Shachat & J. Todd Swarthout, 2013. "Auctioning the Right to Play Ultimatum Games and the Impact on Equilibrium Selection," Games, MDPI, vol. 4(4), pages 1-16, November.
    8. Enrique Fatas & Juan Mañez, 2007. "Are low-price promises collusion guarantees? An experimental test of price matching policies," Spanish Economic Review, Springer;Spanish Economic Association, vol. 9(1), pages 59-77, March.
    9. Choo, Lawrence & Zhou, Xiaoyu, 2022. "Can market selection reduce anomalous behaviour in games?," European Economic Review, Elsevier, vol. 141(C).
    10. Chlaß, Nadine & Perea, Andrés, 2016. "How do people reason in dynamic games?," VfS Annual Conference 2016 (Augsburg): Demographic Change 145881, Verein für Socialpolitik / German Economic Association.
    11. Choo, Lawrence & Kaplan, Todd R. & Zhou, Xiaoyu, 2019. "Can auctions select people by their level-k types?," MPRA Paper 95987, University Library of Munich, Germany.
    12. repec:wyi:journl:002215 is not listed on IDEAS
    13. Cooper, David J. & Ioannou, Christos A. & Qi, Shi, 2018. "Endogenous incentive contracts and efficient coordination," Games and Economic Behavior, Elsevier, vol. 112(C), pages 78-97.
    14. Choo, Lawrence, 2016. "Market competition for decision rights: An experiment based on the “Hat Puzzle Problem”," MPRA Paper 73408, University Library of Munich, Germany.

    More about this item

    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
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:ecinqu:v:41:y:2003:i:4:p:574-591. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press (email available below). General contact details of provider: https://edirc.repec.org/data/weaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.