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Does aversion to the sucker's payoff matter in public goods games?

Author

Listed:
  • Douadia Bougherara
  • Sandrine Costa
  • Gilles Grolleau
  • Lisette Ibanez

Abstract

A usual explanation to low levels of contribution to public goods is the fear of getting the sucker’s payoff (cooperation by the participant and defection by the other players). In order to disentangle the effect of this fear from other motives, we design a public good game where people have an assurance against getting the sucker’s payoff. We show that contributions to the public good under this ‘protective’ design are significantly higher and interact with expectations on other individuals' contribution to the public good. Some policy implications and extensions are suggested.

Suggested Citation

  • Douadia Bougherara & Sandrine Costa & Gilles Grolleau & Lisette Ibanez, 2009. "Does aversion to the sucker's payoff matter in public goods games?," Working Papers SMART - LERECO 09-08, INRA UMR SMART-LERECO.
  • Handle: RePEc:rae:wpaper:200908
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    References listed on IDEAS

    as
    1. Rachel T. A. Croson, 2007. "Theories Of Commitment, Altruism And Reciprocity: Evidence From Linear Public Goods Games," Economic Inquiry, Western Economic Association International, vol. 45(2), pages 199-216, April.
    2. Simon Gachter & Ernst Fehr, 2000. "Cooperation and Punishment in Public Goods Experiments," American Economic Review, American Economic Association, vol. 90(4), pages 980-994, September.
    3. Cason, Timothy N. & Gangadharan, Lata, 2002. "Environmental Labeling and Incomplete Consumer Information in Laboratory Markets," Journal of Environmental Economics and Management, Elsevier, vol. 43(1), pages 113-134, January.
    4. Amartya K. Sen, 1967. "Isolation, Assurance and the Social Rate of Discount," The Quarterly Journal of Economics, Oxford University Press, vol. 81(1), pages 112-124.
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    More about this item

    Keywords

    Experiments; Public good; Sucker’s payoff; Assurance;

    JEL classification:

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

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