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Provision of Multilevel Public Goods through Positive Externalities: Experimental Evidence

Author

Listed:
  • Werner Güth

    () (Max Planck Institute of Economics, Strategic Interaction Group)

  • Lauri Sääksvuori

    () (Max Planck Institute of Economics, Strategic Interaction Group)

Abstract

The provision of public goods regularly embodies interrelated spheres of influence on multiple scales. This article examines the nature of human behavior in a multilevel social dilemma game with positive provision externalities to local and global scales. We report experimental results showing that the behavior in multilevel games is strongly driven by asymmetric conditional cooperation prioritizing local level externalities. Our findings demonstrate how individuals adjust their behavior over time to local conditions. We do not find significant adjustment to the global group average, suggesting that the local group creates a salient reference group for social comparisons in multilevel public goods provision. Our results emphasize the importance of building strong local level commitment when designing institutional responses to promote sustainable provision of globally important public goods like the global climate.

Suggested Citation

  • Werner Güth & Lauri Sääksvuori, 2012. "Provision of Multilevel Public Goods through Positive Externalities: Experimental Evidence," Jena Economic Research Papers 2012-003, Friedrich-Schiller-University Jena.
  • Handle: RePEc:jrp:jrpwrp:2012-003
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    File URL: http://pubdb.wiwi.uni-jena.de/pdf/wp_2012_003.pdf
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    Cited by:

    1. Kingsley, David C., 2016. "Endowment heterogeneity and peer punishment in a public good experiment: Cooperation and normative conflict," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 60(C), pages 49-61.

    More about this item

    Keywords

    Experiment; Groups; Public good; Spillover Game; Transboundary effects;

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • 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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