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Giving Little by Little: Dynamic Voluntary Contribution Games

  • Lise Vesterlund
  • John Duffy
  • Jack Ochs

Shelling (1960) among others have argued that contributions to public goods may be larger if people spread their contributions and give one small contribution at a time. Examining a threshold public good environment, Marx and Matthews (2000) show that multiple rounds may secure a provision level that cannot be achieved when only one round of contributions is available. Interestingly, sequential contributions both increase the benefit of giving and the cost of free riding. In some environments, zero provision is the unique equilibrium of the one-round contribution game, whereas there are equilibria that reach the threshold in the multiple-round game. We study such an environment experimentally. While initially contributions appear to respond to the possibility of making multiple small contributions, this difference diminishes very quickly. Overall there is little evidence that contributions are larger when individuals slowly can contribute to the public good.

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Paper provided by Econometric Society in its series Econometric Society 2004 North American Winter Meetings with number 402.

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Date of creation: 11 Aug 2004
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Handle: RePEc:ecm:nawm04:402
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  1. Potters, J.J.M. & Sefton, M. & Vesterlund, L., 2003. "After You - Endogenous Sequencing in Voluntary Contribution Games," Discussion Paper 2003-98, Tilburg University, Center for Economic Research.
  2. Leslie M. Marx & Steven A. Matthews, 1997. "Dynamic Voluntary Contribution to a Public Project," Discussion Papers 1188, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  3. repec:dgr:kubcen:2000102 is not listed on IDEAS
  4. Isaac, R Mark & Walker, James M, 1988. "Group Size Effects in Public Goods Provision: The Voluntary Contributions Mechanism," The Quarterly Journal of Economics, MIT Press, vol. 103(1), pages 179-99, February.
  5. Marks, Melanie & Croson, Rachel, 1998. "Alternative rebate rules in the provision of a threshold public good: An experimental investigation," Journal of Public Economics, Elsevier, vol. 67(2), pages 195-220, February.
  6. Andreoni,J. & Samuelson,L., 2003. "Building rational cooperation," Working papers 4, Wisconsin Madison - Social Systems.
  7. Andreoni, James & Brown, Paul M. & Vesterlund, Lise, 2002. "What Makes an Allocation Fair? Some Experimental Evidence," Games and Economic Behavior, Elsevier, vol. 40(1), pages 1-24, July.
  8. Palfrey, Thomas R & Rosenthal, Howard, 1994. "Repeated Play, Cooperation and Coordination: An Experimental Study," Review of Economic Studies, Wiley Blackwell, vol. 61(3), pages 545-65, July.
  9. Romano, Richard & Yildirim, Huseyin, 2001. "Why charities announce donations: a positive perspective," Journal of Public Economics, Elsevier, vol. 81(3), pages 423-447, September.
  10. Weber, Roberto A., 2003. "'Learning' with no feedback in a competitive guessing game," Games and Economic Behavior, Elsevier, vol. 44(1), pages 134-144, July.
  11. Bergstrom, Theodore & Blume, Lawrence & Varian, Hal, 1986. "On the private provision of public goods," Journal of Public Economics, Elsevier, vol. 29(1), pages 25-49, February.
  12. Werner Güth & Maria Vittoria Levati & Andreas Stiehler, . "Privately Contributing to Public Goods over Time - An Experimental Study -," Papers on Strategic Interaction 2002-01, Max Planck Institute of Economics, Strategic Interaction Group.
  13. Olivier Compte & Philippe Jehiel, 2004. "Gradualism in Bargaining and Contribution Games," Review of Economic Studies, Oxford University Press, vol. 71(4), pages 975-1000.
  14. Vesterlund, Lise, 2003. "The informational value of sequential fundraising," Journal of Public Economics, Elsevier, vol. 87(3-4), pages 627-657, March.
  15. Dorsey, Robert E, 1992. " The Voluntary Contributions Mechanism with Real Time Revisions," Public Choice, Springer, vol. 73(3), pages 261-82, April.
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