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Preferences and strategic behavior in public goods games

Author

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  • Gilles, Grandjean
  • Mathieu, Lefebvre
  • Marco, Mantovani

Abstract

We analyze experimentally behavior in a finitely repeated public goods game. One of the main results of the literature is that contributions are initially high, and gradually decrease over time. Two explanations of this pattern have been developed: (i) the population is composed of free-riders, who never contribute, and conditional cooperators, who contribute if others do so as well; (ii) strategic players contribute to sustain mutually beneficial future cooperation, but reduce their contributions as the end of the game approaches. This paper contributes to bridging the gap between these views. We analyze preferences and strategic ability in one design by manipulating group composition to form homogeneous groups on both dimensions. Our results highlight the interaction between the two: groups that sustain high levels of cooperation are composed of members who share a common inclination toward cooperation and have the strategic abilities to recognize and reap the benefits of enduring cooperation.

Suggested Citation

  • Gilles, Grandjean & Mathieu, Lefebvre & Marco, Mantovani, 2018. "Preferences and strategic behavior in public goods games," Working Papers 395, University of Milano-Bicocca, Department of Economics, revised 19 Dec 2018.
  • Handle: RePEc:mib:wpaper:395
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    References listed on IDEAS

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    1. Chen, Chia-Ching & Chiu, I-Ming & Smith, John & Yamada, Tetsuji, 2013. "Too smart to be selfish? Measures of cognitive ability, social preferences, and consistency," Journal of Economic Behavior & Organization, Elsevier, vol. 90(C), pages 112-122.
    2. Ciril Bosch-Rosa & Thomas Meissner & Antoni Bosch-Domènech, 2018. "Cognitive bubbles," Experimental Economics, Springer;Economic Science Association, vol. 21(1), pages 132-153, March.
    3. Fischbacher, Urs & Gachter, Simon & Fehr, Ernst, 2001. "Are people conditionally cooperative? Evidence from a public goods experiment," Economics Letters, Elsevier, vol. 71(3), pages 397-404, June.
    4. Lohse, Johannes, 2016. "Smart or selfish – When smart guys finish nice," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 64(C), pages 28-40.
    5. David Gill & Victoria Prowse, 2016. "Cognitive Ability, Character Skills, and Learning to Play Equilibrium: A Level-k Analysis," Journal of Political Economy, University of Chicago Press, vol. 124(6), pages 1619-1676.
    6. Gneezy, Uri & Rustichini, Aldo & Vostroknutov, Alexander, 2010. "Experience and insight in the Race game," Journal of Economic Behavior & Organization, Elsevier, vol. 75(2), pages 144-155, August.
    7. Basteck, Christian & Mantovani, Marco, 2018. "Cognitive ability and games of school choice," Games and Economic Behavior, Elsevier, vol. 109(C), pages 156-183.
    8. Ben-Ner, Avner & Halldorsson, Freyr, 2010. "Trusting and trustworthiness: What are they, how to measure them, and what affects them," Journal of Economic Psychology, Elsevier, vol. 31(1), pages 64-79, February.
    9. Burnham, Terence C. & Cesarini, David & Johannesson, Magnus & Lichtenstein, Paul & Wallace, Björn, 2009. "Higher cognitive ability is associated with lower entries in a p-beauty contest," Journal of Economic Behavior & Organization, Elsevier, vol. 72(1), pages 171-175, October.
    10. repec:eee:jeborg:v:142:y:2017:i:c:p:79-91 is not listed on IDEAS
    11. Ananish Chaudhuri, 2011. "Sustaining cooperation in laboratory public goods experiments: a selective survey of the literature," Experimental Economics, Springer;Economic Science Association, vol. 14(1), pages 47-83, March.
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    More about this item

    Keywords

    Voluntary contribution; conditional cooperation; free riding; strategic sophistication.;

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior

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