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Context effects in a negative externality experiment

Author

Listed:
  • Kent D. Messer

    () (Department of Food & Resource Economics,University of Delaware)

  • Jordan F. Suter

    () (Department of Economics and Environmental Studies,Oberlin College)

  • Jubo Yan

    () (Graduate Student, Cornell University)

Abstract

This study investigates the degree to which framing and context influence observed rates of free-riding behavior in a negative externality laboratory experiment. Building on the work of Andreoni (1995a) and Messer et al. (2007) we frame the decision not to contribute to a public fund as generating a negative externality on other group members. The experimental treatments involving 252 subjects vary communication, voting, and the status quo of the initial endowment. Results indicate that allowing groups the opportunity to communicate and vote significantly reduces rates of free-riding, and this effect is especially pronounced when initial endowments are placed in the private as opposed to the public fund.

Suggested Citation

  • Kent D. Messer & Jordan F. Suter & Jubo Yan, 2010. "Context effects in a negative externality experiment," Working Papers 10-09, University of Delaware, Department of Economics.
  • Handle: RePEc:dlw:wpaper:10-09.
    as

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    File URL: http://graduate.lerner.udel.edu/sites/default/files/ECON/PDFs/RePEc/dlw/WorkingPapers/2010/UDWP2010-09.pdf
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    References listed on IDEAS

    as
    1. Kotani, Koji & Messer, Kent D. & Schulze, William D., 2010. "Matching Grants and Charitable Giving: Why People Sometimes Provide a Helping Hand to Fund Environmental Goods," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 39(2), April.
    2. Kotani, Koji & Messer, Kent D. & Schulze, William D., 2010. "Matching Grants and Charitable Giving: Why People Sometimes Provide a Helping Hand to Fund Environmental Goods," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 39(2), April.
    3. Baker, Michael & Payne, A. Abigail & Smart, Michael, 1999. "An empirical study of matching grants: the 'cap on CAP'," Journal of Public Economics, Elsevier, vol. 72(2), pages 269-288, May.
    4. Messer, Kent D. & Allen, William L., III, 2010. "Applying Optimization and the Analytic Hierarchy Process to Enhance Agricultural Preservation Strategies in the State of Delaware," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 39(3), October.
    5. Messer, Kent D. & Allen, William L., 2010. "Applying Optimization and the Analytic Hierarchy Process to Enhance Agricultural Preservation Strategies in the State of Delaware," Agricultural and Resource Economics Review, Cambridge University Press, vol. 39(03), pages 442-456, October.
    6. Hayri ├ľnal, 1997. "Trade-off between Structural Diversity and Economic Objectives in Forest Management," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(3), pages 1001-1012.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Negative externality; voluntary contribution mechanism; cheap talk; voting; status quo bias; experimental economics;

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • H4 - Public Economics - - Publicly Provided Goods

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