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Individual Evolutionary Learning, Other-regarding Preferences, and the Voluntary Contributions Mechanism

The data from experiments with the Voluntary Contributions Mechanism suggest five stylized facts, including the restart effect. To date, no theory has explained all of these facts simultaneously. We merge our Individual Evolutionary Learning model with a variation of heterogenous other-regarding preferences and a distribution of types to provide a new theory that does. In addition, our theory answers some open questions concerning the data on partners-strangers experiments. One interesting feature of the theory is that conditional cooperation is not a type but arises endogenously as a behavior. The data generated by our model are quantitatively similar to data from a variety of experiments, and experimenters, and are insensitive to moderate variations in the parameters of the model. That is, we have a robust explanation for most behavior in VCM experiments.

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File URL: http://www.sfu.ca/econ-research/RePEc/sfu/crabex/wp12-01.pdf
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Paper provided by CRABE, Department of Economics, Simon Fraser University in its series Working Papers with number wp12-01.

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Length: 42
Date of creation: Jun 2012
Date of revision:
Handle: RePEc:sfu:sfudps:wp12-01
Contact details of provider: Web page: http://www.sfu.ca/crabe

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  13. Mengel, Friederike & Peeters, Ronald, 2011. "Strategic behavior in repeated voluntary contribution experiments," Journal of Public Economics, Elsevier, vol. 95(1), pages 143-148.
  14. Keser, Claudia & van Winden, Frans, 2000. " Conditional Cooperation and Voluntary Contributions to Public Goods," Scandinavian Journal of Economics, Wiley Blackwell, vol. 102(1), pages 23-39, March.
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