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Does Heterogeneity Spoil the Basket? The Role of Productivity and Feedback Information on Public Good Provision

Author

Listed:
  • Andrej Angelovski

    (LUISS Guido Carli, Rome)

  • Daniela Di Cagno

    (LUISS Guido Carli, Rome)

  • Werner Güth

    (Luiss Guido Carli, Rome; Frankfurt School of Finance and Management, Frankfurt; Max Planck Institute on Collective Goods, Bonn)

  • Francesca Marazzi

    (Università degli Studi di Roma Tor Vergata)

  • Luca Panaccione

    (Università degli Studi di Roma Tor Vergata)

Abstract

In a circular neighborhood of eight, each member contributes repeatedly to two asymmetric (i.e. with different freeriding incentives) local public goods, one with the left and one with the right neighbor. All two-person public good games provide only local feedback information and are structurally independent in spite of their overlapping player sets. Here heterogeneity across neighbors is induced by two randomly selected members, named "Bad" Apples, who are either less productive or excluded from periodic information feedback about their payoffs and neighbors' contributions. Although the presence of both "Bad" Apple types leads to the neighborhood, as a whole, evolving less cooperatively, the way in which it spreads is quite different. While less productive "Bad" Apples directly initiate the spoiling of the basket due to their low contributions, "Bad" Apples excluded from periodic information are exploited by their neighbors. Furthermore, we find evidence that "Bad" Apples' positioning affects contributions in the neighborhood.

Suggested Citation

  • Andrej Angelovski & Daniela Di Cagno & Werner Güth & Francesca Marazzi & Luca Panaccione, 2016. "Does Heterogeneity Spoil the Basket? The Role of Productivity and Feedback Information on Public Good Provision," Working Papers CESARE 1604, Dipartimento di Economia e Finanza, LUISS Guido Carli.
  • Handle: RePEc:lui:cesare:1604
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    More about this item

    Keywords

    Public goods; behavioral spillovers; experiments; voluntary contribution mechanism; 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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