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Dynamic Analysis of the Evolution of Conventions in a Public Goods Experiment with Intergenerational Advice

  • Ananish Chaudhuri
  • Pushkar Maitra

In this paper we analyse contributions to a public good within an inter-generational framework where at the end of each session one generation of subjects leave advice for the succeeding generation via free form messages. Such advice can be private (advice left by one player in generation is given only to her immediate successor in generation) or public (advice left by players of generation is made available to all members of generation). We estimate a panel regression model that enables us to understand the dynamics of the process better and to highlight the learning that occurs over time. Our estimation results show that contributions in any period depend crucially on contributions in the previous period and on the group average in the previous period - more specifically whether a subject's own contribution in the previous period fell above or below the group average. We find that in the public advice treatment when a subject's contribution fell below the group average in the previous period there is a tendency on the part of that subject to increase contributions in the next period.

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Paper provided by Econometric Society in its series Econometric Society 2004 North American Summer Meetings with number 37.

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Date of creation: 11 Aug 2004
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Handle: RePEc:ecm:nasm04:37
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  1. R. M. Isaac & J. M. Walker, 2010. "Group size effects in public goods provision: The voluntary contribution mechanism," Levine's Working Paper Archive 310, David K. Levine.
  2. Andrew Schotter, 2003. "Decision Making with Naive Advice," American Economic Review, American Economic Association, vol. 93(2), pages 196-201, May.
  3. Andreoni, J., 1993. "Cooperation in Public Goods Experiments: Kindness or Confusion?," Working papers 9309, Wisconsin Madison - Social Systems.
  4. Chaudhuri, Ananish & Graziano, Sara, 2003. "Evolution of Conventions in an Experimental Public Goods Game with Private and Public Knowledge of Advice," Working Papers 201, Department of Economics, The University of Auckland.
  5. Marwell, Gerald & Ames, Ruth E., 1981. "Economists free ride, does anyone else? : Experiments on the provision of public goods, IV," Journal of Public Economics, Elsevier, vol. 15(3), pages 295-310, June.
  6. Simon Gachter & Ernst Fehr, 2000. "Cooperation and Punishment in Public Goods Experiments," American Economic Review, American Economic Association, vol. 90(4), pages 980-994, September.
  7. Keser, Claudia & van Winden, Frans, 2000. " Conditional Cooperation and Voluntary Contributions to Public Goods," Scandinavian Journal of Economics, Wiley Blackwell, vol. 102(1), pages 23-39, March.
  8. Schotter, A. & Sopher, B., 2001. "Social Learning and Coordination Conventions in Inter-Generational Games: An Experimental Study," Working Papers 01-10, C.V. Starr Center for Applied Economics, New York University.
  9. Matthew Rabin, 1998. "Psychology and Economics," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 11-46, March.
  10. Mark Isaac, R. & McCue, Kenneth F. & Plott, Charles R., 1985. "Public goods provision in an experimental environment," Journal of Public Economics, Elsevier, vol. 26(1), pages 51-74, February.
  11. Andreoni, James, 1988. "Why free ride? : Strategies and learning in public goods experiments," Journal of Public Economics, Elsevier, vol. 37(3), pages 291-304, December.
  12. Shotter, A. & Sopher, B., 2001. "Advice and Behavior in Intergenerational Ultimatum Games: An Experimental Approach," Working Papers 01-04, C.V. Starr Center for Applied Economics, New York University.
  13. R. Isaac & James Walker & Susan Thomas, 1984. "Divergent evidence on free riding: An experimental examination of possible explanations," Public Choice, Springer, vol. 43(2), pages 113-149, January.
  14. Andereoni, J., 1988. "Why Free Ride? Strategies And Learning In Public Goods Experiments," Working papers 375, Wisconsin Madison - Social Systems.
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