Complementarity in the Private Provision of Public Goods by Homo Pecuniarius and Homo Behavioralis
We examine coordination in private provision of public goods when agents' contributions are complementary. When complementarity is sufficiently high an additional full-contribution equilibrium emerges. We experimentally investigate subjectsâ€™ behavior using a between-subject design that varies complementarity. When two equilibria exist, subjects coordinate on the full-contribution equilibrium. When complementarity is sizable but only a zero-contribution equilibrium exists, subjects persistently contribute above it. Observed choices and and other nonchoice data indicate heterogeneity among subjects and two distinct types. Homo pecuniarius maximizes profits by best-responding to beliefs, while Homo behavioralis identifies this strategy but chooses to deviate from it â€“ sacrificing pecuniary rewards to support altruism or competitiveness.
|Date of creation:||15 Nov 2015|
|Date of revision:||02 May 2016|
|Contact details of provider:|| Web page: http://www.economics.ubc.ca/|
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