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Voluntary contributions with risky and uncertain marginal returns: the importance of the minimal value

Author

Listed:
  • M. Vittoria Levati

    (Max Planck Institute of Economics, Jena)

  • Andrea Morone

    (Department of Economics and Mathematics, University of Bari)

Abstract

Previous research indicates that risky and uncertain marginal returns from the public good significantly lower contributions. This paper presents experimental results illustrating that the effects of risk and uncertainty depend on the employed parameterization. Speci?cally, if the value of the marginal per capita return under the worst state of nature allows for some efficiency gains, the presence of risk and uncertainty about the public good's value is not detrimental to cooperation. This ?nding casts doubt on the hypothesis that risk and uncertainty, per se, weaken people's willingness to contribute.

Suggested Citation

  • M. Vittoria Levati & Andrea Morone, 2009. "Voluntary contributions with risky and uncertain marginal returns: the importance of the minimal value," Jena Economics Research Papers 2009-062, Friedrich-Schiller-University Jena.
    • Handle: RePEc:jrp:jrpwrp:2009-062
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    File URL: https://oweb.b67.uni-jena.de/Papers/jerp2009/wp_2009_062.pdf
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    More about this item

    Keywords

    Public goods experiments; Voluntary contributions; Risk; Uncertainty;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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