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Competition for status acquisition in public good games

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  • Félix Muñoz-García

Abstract

This paper examines the role of status acquisition as a motive for giving in voluntary contributions to public goods. In particular, every donor's status is given by the difference between his contribution and that of the other donor. Specifically, I show that contributors give more than in standard models where status is not considered, their donation is increasing in the value they assign to status and, under certain conditions, in the value that their opponents assign to status (reflecting donors' competition to gain social status). Furthermore, I consider contributors' equilibrium strategies both in simultaneous and sequential contribution mechanisms. Then, I compare total contributions in both of these mechanisms. I find that the simultaneous contribution order generates higher total contributions than the sequential mechanism only when donors are sufficiently homogeneous in the value they assign to status. Otherwise, the sequential mechanism generates the highest contributions. Copyright 2011 Oxford University Press 2011 All rights reserved, Oxford University Press.

Suggested Citation

  • Félix Muñoz-García, 2011. "Competition for status acquisition in public good games," Oxford Economic Papers, Oxford University Press, vol. 63(3), pages 549-567, July.
  • Handle: RePEc:oup:oxecpp:v:63:y:2011:i:3:p:549-567
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    File URL: http://hdl.handle.net/10.1093/oep/gpr007
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    References listed on IDEAS

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    1. Potters, Jan & Sefton, Martin & Vesterlund, Lise, 2005. "After you--endogenous sequencing in voluntary contribution games," Journal of Public Economics, Elsevier, vol. 89(8), pages 1399-1419, August.
    2. Ed Hopkins & Tatiana Kornienko, 2004. "Running to Keep in the Same Place: Consumer Choice as a Game of Status," American Economic Review, American Economic Association, vol. 94(4), pages 1085-1107, September.
    3. Ball, Sheryl & Eckel, Catherine C., 1998. "The economic value of status," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 27(4), pages 495-514.
    4. Sheryl Ball & Catherine Eckel & Philip J. Grossman & William Zame, 2001. "Status in Markets," The Quarterly Journal of Economics, Oxford University Press, vol. 116(1), pages 161-188.
    5. John Morgan, 2000. "Financing Public Goods by Means of Lotteries," Review of Economic Studies, Oxford University Press, vol. 67(4), pages 761-784.
    6. Congleton, Roger D., 1989. "Efficient status seeking: Externalities, and the evolution of status games," Journal of Economic Behavior & Organization, Elsevier, vol. 11(2), pages 175-190, March.
    7. John Duffy & Tatiana Kornienko, 2005. "Does Competition Affect Giving? An Experimental Study," Experimental 0508002, EconWPA.
    8. Varian, Hal R., 1994. "Sequential contributions to public goods," Journal of Public Economics, Elsevier, vol. 53(2), pages 165-186, February.
    9. repec:pit:wpaper:266 is not listed on IDEAS
    10. Romano, Richard & Yildirim, Huseyin, 2001. "Why charities announce donations: a positive perspective," Journal of Public Economics, Elsevier, vol. 81(3), pages 423-447, September.
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    More about this item

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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