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The sandwich property in the voluntary contribution mechanism:The instability approach

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  • Tatsuyoshi Saijo

    (School of Management, Kochi University of Technology)

Abstract

This paper proposes an alternative explanation for the sandwich property in voluntary contribution mechanism experiments. This property refers to the phenomenon of experimental data being ``sandwiched'' between a Nash equilibrium above the midpoint of the endowment and a Nash equilibrium below this midpoint. The explanation is in terms of the instability of the system with best response dynamics, i.e., ``pulsing'' behaviors, in nonlinear environments rather than the quantal response equilibrium analysis. Since most experimental models are unstable in quasilinear environments (where the utility function is linear in a private good and nonlinear in a public good), and Cobb–Douglas environments, using equilibrium analysis is problematic.

Suggested Citation

  • Tatsuyoshi Saijo, 2015. "The sandwich property in the voluntary contribution mechanism:The instability approach," Working Papers SDES-2015-13, Kochi University of Technology, School of Economics and Management, revised Mar 2015.
    • Handle: RePEc:kch:wpaper:sdes-2015-13
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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