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Heterogeneous Reactions to Heterogeneity in Returns from Public Goods

Author

Listed:
  • Urs Fischbacher

    (Thurgau Institute of Economics at the University of Konstanz, Department of Economics, Germany)

  • Simeon Schudy

    (Thurgau Institute of Economics at the University of Konstanz, Department of Economics, Germany)

  • Sabrina Teyssier

    (Thurgau Institute of Economics at the University of Konstanz, Department of Economics, Germany)

Abstract

In many cases individuals benefit differently from the provision of a public good. We study in a laboratory experiment how heterogeneity in returns and uncertainty affects unconditional and conditional contribution behavior in a linear public goods game. The elicitation of conditional contributions in combination with a within subject design allows us to investigate belief-independent and type-specific reactions to heterogeneity. We find that, on average, heterogeneity in returns decreases unconditional contributions but does not affects conditional contributions only weakly. Uncertainty in addition to heterogeneity reduces conditional contributions slightly. Individual reactions to heterogeneity differ systematically. Selfish subjects and one third of conditional cooperators do not react to heterogeneity whereas the reactions of the remaining conditional cooperators vary. A substantial part of heterogeneity in reactions can be explained by inequity aversion which accounts for different reference groups subjects compare to.

Suggested Citation

  • Urs Fischbacher & Simeon Schudy & Sabrina Teyssier, 2012. "Heterogeneous Reactions to Heterogeneity in Returns from Public Goods," Working Paper Series of the Department of Economics, University of Konstanz 2012-14, Department of Economics, University of Konstanz.
  • Handle: RePEc:knz:dpteco:1214
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    References listed on IDEAS

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    More about this item

    Keywords

    public goods; social preferences; conditional cooperation; heterogeneity;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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