Disposition, History and Contributions in Public Goods Experiments
Private incentives to invest in a public good are modeled as self- interested reciprocity where individuals use reputational scoring rules to determine their optimal level of investment. The model predicts that the disposition of any subject to cooperate is revealed by their first period investment in a voluntary contribution experiment, and that grouping cooperative subjects together will improve, and in some circumstances sustain, their private investment in the public good. Actual investment behavior is then studied with laboratory experiments that compare the contributions of subjects randomly reassigned into groups to contributions under a mechanism that sorts subjects into groups based on their individual investment decisions. The sorting mechanism helps to keep subjects with cooperative dispositions together and leads to statistically significant increases, relative to the random matching condition, in cooperators’ investments in the public good.
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