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Using the Strategy Method and Elicited Beliefs to Explain Group Size and MPCR Effects in Public Good Experiments

Author

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  • Gächter, Simon

    (University of Nottingham)

  • Fages, Diego Marino

    (University of Durham)

Abstract

In this paper we disentangle the role of cooperative preferences and beliefs for explaining MPCR and group size effects in public goods games. To achieve this, we use the ABC approach, which explains cooperation as a function of cooperative attitudes and beliefs. We measure cooperative attitudes using the incentive-compatible strategy method by Fischbacher et al. (2001, Economics Letters, 71-3, 397–404)(FGF). However, to keep the incentives in the strategy method equal across all group sizes (which FGF does not), we also compare FGF with a version of the strategy method that is scalable to any group size. We find that preference types are similar across strategy methods, group sizes of 3 and 9, and MPCRs of 0.4 and 0.8. Further experiments with group sizes of 3 and 30 again find similar distributions of conditional preferences. The ABC approach predicts actual cooperation in all conditions and for both strategy methods and reveals that, controlling for elicited preferences, differences in cooperation levels observed across the various games are mostly due to differences in beliefs.

Suggested Citation

  • Gächter, Simon & Fages, Diego Marino, 2023. "Using the Strategy Method and Elicited Beliefs to Explain Group Size and MPCR Effects in Public Good Experiments," IZA Discussion Papers 16605, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp16605
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    More about this item

    Keywords

    public goods; group size; MPCR; strategy method; ABC approach; conditional cooperation; experiments;
    All these keywords.

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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