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Simultaneous and Sequential Contributions to Step-level Public Goods

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  • Hans-Theo Normann
  • Holger A. Rau

Abstract

In a step-level public-good experiment, we investigate how the order of moves (simultaneous vs. sequential) and the number of step levels (one vs. two) affects public-good provision in a two-player game. We find that the sequential order of moves significantly improves public-good provision and payoffs, even though second movers often punish first movers who give less than half of the threshold contribution. The additional second step level—which is not feasible in standard Nash equilibrium—leads to higher contributions but does not improve public-good provision and lowers payoffs. We calibrate the parameters of Fehr and Schmidt’s model of inequality aversion to make quantitative predictions. We find that actual behavior fits remarkably well with several predictions in a quantitative sense.

Suggested Citation

  • Hans-Theo Normann & Holger A. Rau, 2015. "Simultaneous and Sequential Contributions to Step-level Public Goods," Journal of Conflict Resolution, Peace Science Society (International), vol. 59(7), pages 1273-1300, October.
    • Handle: RePEc:sae:jocore:v:59:y:2015:i:7:p:1273-1300
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    Cited by:

    1. Malte Müller & Jens Rommel & Christian Kimmich, 2018. "Farmers’ Adoption of Irrigation Technologies: Experimental Evidence from a Coordination Game with Positive Network Externalities in India," German Economic Review, Verein für Socialpolitik, vol. 19(2), pages 119-139, May.
    2. Liu, Penghui & Liu, Jing, 2017. "Contribution diversity and incremental learning promote cooperation in public goods games," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 486(C), pages 827-838.
    3. Friehe, Tim & Tabbach, Avraham, 2018. "A comparison of simple action-based and outcome-based policies for emergency-like situations," Mathematical Social Sciences, Elsevier, vol. 92(C), pages 22-34.
    4. Jörg Spiller & Friedel Bolle, 2017. "Experimental investigations of coordination games: high success rates, invariant behavior, and surprising dynamics," Discussion Paper Series RECAP15 28, RECAP15, European University Viadrina, Frankfurt (Oder).

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