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Does Uncertainty Deter Provision of Public Goods?

Author

Listed:
  • Béatrice Boulu-Reshef

    () (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

  • Samuel Brott

    () (Berkeley Research Group, LLC)

  • Adam Zylbersztejn

    () (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UJM - Université Jean Monnet [Saint-Étienne] - Université de Lyon - CNRS - Centre National de la Recherche Scientifique)

Abstract

We study a finitely repeated public goods game (based on the voluntary contribution mechanism) played under complete uncertainty about the marginal benefit of the public good relative to the private consumption (commonly known as the marginal per capita return): neither one's marginal per capita return nor other players' marginal per capita returns are known at the time of decisionmaking. We show that contributions are equivalent when the rate of return is predetermined and when it is uncertain, and display a similar decay over time. Combined with the previous experimental findings, our results suggest that the cooperation in public goods games is sensitive to the source of uncertainty about marginal per capita return.

Suggested Citation

  • Béatrice Boulu-Reshef & Samuel Brott & Adam Zylbersztejn, 2017. "Does Uncertainty Deter Provision of Public Goods?," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-01582793, HAL.
    • Handle: RePEc:hal:cesptp:halshs-01582793
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-01582793
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    References listed on IDEAS

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    1. Fisher, Joseph & Isaac, R. Mark & Schatzberg, Jeffrey W & Walker, James M., 1995. "Heterogenous Demand for Public Goods: Behavior in the Voluntary Contributions Mechanism," Public Choice, Springer, vol. 85(3-4), pages 249-266, December.
    2. Oliver Kim & Mark Walker, 1984. "The free rider problem: Experimental evidence," Public Choice, Springer, vol. 43(1), pages 3-24, January.
    3. Brock V Stoddard, 2015. "Probabilistic Production of a Public Good," Economics Bulletin, AccessEcon, vol. 35(1), pages 37-52.
    4. Lata Gangadharan & Veronika Nemes, 2009. "Experimental Analysis Of Risk And Uncertainty In Provisioning Private And Public Goods," Economic Inquiry, Western Economic Association International, vol. 47(1), pages 146-164, January.
    5. Urs Fischbacher & Simeon Schudy & Sabrina Teyssier, 2014. "Heterogeneous reactions to heterogeneity in returns from public goods," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 43(1), pages 195-217, June.
    6. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer;Economic Science Association, vol. 10(2), pages 171-178, June.
    7. Dickinson, David L., 1998. "The voluntary contributions mechanism with uncertain group payoffs," Journal of Economic Behavior & Organization, Elsevier, vol. 35(4), pages 517-533, May.
    8. M. Levati & Andrea Morone & Annamaria Fiore, 2009. "Voluntary contributions with imperfect information: An experimental study," Public Choice, Springer, vol. 138(1), pages 199-216, January.
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    Cited by:

    1. Caleb A. Cox & Brock Stoddard, 2018. "Common-Value Public Goods and Informational Social Dilemmas," Working Papers 18-04, Department of Economics, Appalachian State University.

    More about this item

    Keywords

    Cooperation; uncertainty; voluntary contribution mechanism; public good; expected return;

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior

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