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Morally Monotonic Choice in Public Good Games

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  • James C. Cox
  • Vjollca Sadiraj
  • Susan Xu Tang

Abstract

Decades of robust data from public good games with positive and negative externalities challenges internal consistency axioms that comprise rational choice theory. This paper reports an extension of rational choice theory that incorporates observable moral reference points. This morally monotonic choice theory is consistent with data in the literature and has idiosyncratic features that motivate new experimental designs. We report experiments on choices in public good games with positive, negative, and mixed-sign externalities, with and without non-binding quotas on extractions or minimum contributions. Data favors choices predicted by moral monotonicity over choices predicted by: (a) conventional rational choice theory; or (b) conventional reference dependent model of loss aversion.

Suggested Citation

  • James C. Cox & Vjollca Sadiraj & Susan Xu Tang, 2020. "Morally Monotonic Choice in Public Good Games," Experimental Economics Center Working Paper Series 2020-05, Experimental Economics Center, Andrew Young School of Policy Studies, Georgia State University.
  • Handle: RePEc:exc:wpaper:2020-05
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    File URL: http://excen.gsu.edu/workingpapers/GSU_EXCEN_WP_2020-05.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    choice theory; public goods; externalities; crowding out; moral reference points; experiment;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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