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Voluntary Contributions by Consent or Dissent

  • Tan, Jonathan H.W.
  • Breitmoser, Yves
  • Bolle, Friedel

We study games where voluntary contributions can be adjusted until a steady state is found. In consent games contributions start at zero and can be increased by consent, and in dissent games contributions start high and can be decreased by dissent. Equilibrium analysis predicts free riding in consent games but, in contrast, as much as socially efficient outcomes in dissent games. In our experiment, inexperienced subjects contribute high in consent games and low in dissent games, but behavior converges toward equilibrium predictions over time and eventually experienced subjects contribute as predicted: low in consent games and high in dissent games. Observed deviations from equilibrium in consent games are best explained by level-k reasoning, and those in dissent games are best explained by hierarchical reasoning formalized as nested logit equilibrium.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 22001.

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Date of creation: 09 Apr 2010
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Handle: RePEc:pra:mprapa:22001
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