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Complementarity in the Private Provision of Public Goods by Homo Pecuniarius and Homo Behavioralis

Listed author(s):
  • Fenig, Guidon
  • Gallipoli, Giovanni
  • Halevy, Yoram

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 subjects’ 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 – sacrificing pecuniary rewards to support altruism or competitiveness.

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File URL: http://faculty.arts.ubc.ca/yhalevy/VCMC.pdf
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Paper provided by Vancouver School of Economics in its series Microeconomics.ca working papers with number yoram_halevy-2015-21.

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Length: 60 pages
Date of creation: 15 Nov 2015
Date of revision: 02 May 2016
Handle: RePEc:ubc:pmicro:yoram_halevy-2015-21
Contact details of provider: Web page: http://www.economics.ubc.ca/

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  1. Jan Potters & Sigrid Suetens, 2009. "Cooperation in Experimental Games of Strategic Complements and Substitutes," Review of Economic Studies, Oxford University Press, vol. 76(3), pages 1125-1147.
  2. Maria P. Recalde & Arno Riedl & Lise Vesterlund, 2014. "Error Prone Inference from Response Time: The Case of Intuitive Generosity," CESifo Working Paper Series 4987, CESifo Group Munich.
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  5. Harrison, Glenn W & Hirshleifer, Jack, 1989. "An Experimental Evaluation of Weakest Link/Best Shot Models of Public Goods," Journal of Political Economy, University of Chicago Press, vol. 97(1), pages 201-225, February.
  6. Ge, Yanlin & Chen, Lingen & Sun, Fengrui & Wu, Chih, 2005. "Reciprocating heat-engine cycles," Applied Energy, Elsevier, vol. 81(4), pages 397-408, August.
  7. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer;Economic Science Association, vol. 10(2), pages 171-178, June.
  8. 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.
  9. Josh Cherry & Stephen Salant & Neslihan Uler, 2015. "Experimental departures from self-interest when competing partnerships share output," Experimental Economics, Springer;Economic Science Association, vol. 18(1), pages 89-115, March.
  10. repec:lmu:muenar:20867 is not listed on IDEAS
  11. Jack Hirshleifer, 1983. "From weakest-link to best-shot: The voluntary provision of public goods," Public Choice, Springer, vol. 41(3), pages 371-386, January.
  12. Steiger, Eva-Maria & Zultan, Ro'i, 2014. "See no evil: Information chains and reciprocity," Journal of Public Economics, Elsevier, vol. 109(C), pages 1-12.
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