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Facing Inflated Rules – Experimental Evidence from Threshold Public Goods Games

Author

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  • Grund, Christian

    (RWTH Aachen University)

  • Monschau, Philipp

    (RWTH Aachen University)

Abstract

We study the role of purpose-based rules for behavior and outcomes in a threshold public good game. Rules can be sufficient or even inflated in terms of proposing a fulfilling behavior. We conduct a lab experiment to describe the implications caused by the inflation of a rule. Our study shows that inflated rules are obeyed less. Yet, rule-following occurs also with inflated rules which leads to lower efficiency regarding exactly providing the threshold. A fair share option can help to coordinate efficiently. We complement our analysis by the investigation of the role of the implemented rules for the ex-post optimal behavior, i.e. evaluating the individual contribution depending on the individual payoff.

Suggested Citation

  • Grund, Christian & Monschau, Philipp, 2025. "Facing Inflated Rules – Experimental Evidence from Threshold Public Goods Games," IZA Discussion Papers 18075, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp18075
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    JEL classification:

    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • M5 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics

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