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Heterogeneous Social Preferences and the Dynamics of Free Riding in Public Good Experiments

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  • Urs Fischbacher
  • Simon Gaechter

Abstract

We provide a direct test of the role of social preferences and beliefs in voluntary cooperation and its decline. We elicit individuals’ cooperation preference in one experiment and use them – as well as subjects’ elicited beliefs – to make predictions about contributions to a public good played repeatedly. We find substantial heterogeneity in people’s preferences. With simulation methods based on this data, we show that the decline of cooperation is driven by the fact that most people have a preference to contribute less than others. Belief formation and virtual learning do not contribute to the decline of cooperation. Universal free riding is very likely despite the fact that most people are not selfish.
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Suggested Citation

  • Urs Fischbacher & Simon Gaechter, 2008. "Heterogeneous Social Preferences and the Dynamics of Free Riding in Public Good Experiments," TWI Research Paper Series 27, Thurgauer Wirtschaftsinstitut, Universit�t Konstanz.
  • Handle: RePEc:twi:respas:0027
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    References listed on IDEAS

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    Cited by:

    1. Christoph Engel & Bernd Irlenbusch, 2010. "Turning the Lab into Jeremy Bentham’s Panopticon. The Effect of Punishment on Offenders and Non-Offenders," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2010_06, Max Planck Institute for Research on Collective Goods.
    2. repec:pit:wpaper:383 is not listed on IDEAS

    More about this item

    Keywords

    Public goods experiments; social preferences; conditional cooperation; free riding;

    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
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers

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