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External Matching Funds and the Provision of Public Goods: An Experimental Study

  • Ronald J. Baker II


    (Millersville University of Pennsylvania)

  • James M. Walker


    (Indiana University - Bloomington)

  • Ioana Schiopu


    (Indiana University - Bloomington)

Registered author(s):

    The voluntary provision of a pure public good is studied in the presence of an anonymous external donor. New data generated using experimental procedures employing both extra-credit and cash incentives, as well as asynchronous access to real-time decision rounds lasting several days, are compared to previous data generated using traditional cash-only, synchronous-access laboratory procedures. The effect on resource allocations to the public good of introducing external matching funds is examined in two different settings, lump-sum matching and one-to-one matching. The new data confirm the robustness of results previously reported by the authors to the change in laboratory procedures and incentives. The new data are then used to extend the parameter space in which the two matching mechanisms are studied, including: varying within-round information regarding the current level of public-good allocations, varying the marginal rate of return from the public good, and varying group size from four to twenty group members.

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    Paper provided by Center for Applied Economics and Policy Research, Economics Department, Indiana University Bloomington in its series Caepr Working Papers with number 2010-003.

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    Length: 37 pages
    Date of creation: Feb 2010
    Date of revision:
    Handle: RePEc:inu:caeprp:2010-003
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    1. Cameron,A. Colin & Trivedi,Pravin K., 2005. "Microeconometrics," Cambridge Books, Cambridge University Press, number 9780521848053.
    2. Baker II, Ronald J. & Walker, James M. & Williams, Arlington W., 2009. "Matching contributions and the voluntary provision of a pure public good: Experimental evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 70(1-2), pages 122-134, May.
    3. Glenn W. Harrison & John A. List, 2004. "Field Experiments," Journal of Economic Literature, American Economic Association, vol. 42(4), pages 1009-1055, December.
    4. Smith, Vernon L & Walker, James M, 1993. "Monetary Rewards and Decision Cost in Experimental Economics," Economic Inquiry, Western Economic Association International, vol. 31(2), pages 245-61, April.
    5. repec:feb:artefa:0105 is not listed on IDEAS
    6. repec:feb:artefa:0089 is not listed on IDEAS
    7. 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.
    8. Isaac, R. Mark & Walker, James M. & Williams, Arlington W., 1994. "Group size and the voluntary provision of public goods : Experimental evidence utilizing large groups," Journal of Public Economics, Elsevier, vol. 54(1), pages 1-36, May.
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