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The Value of Non-Binding Announcements in Public Goods Experiments: some Theory and Experimental Evidence

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  • Markwardt, Gunther
  • Dittrich, Marcus
  • Berlemann, Michael

Abstract

In this paper we present three simple theoretical models to explain the influence of the possibility to make non-binding announcements on future investment behaviour in public good settings. Our models build on the idea that voluntary contributions to the supply of a public good might be motivated by some form of joy of giving. We show that the possibility to make non-binding announcements has a positive effect on cooperative behaviour, especially if individual announcements and factual investments are communicated to the players after each round. We also show that this result holds true even though the players have an incentive to overstate their true degrees of cooperativeness. Altogether, our theoretical considerations point in the direction that revealing as much information on individual intentions and factual behaviour as possible enhances cooperative behaviour. These conclusions are broadly confirmed by the results of a series of classroom experiments we present.

Suggested Citation

  • Markwardt, Gunther & Dittrich, Marcus & Berlemann, Michael, 2004. "The Value of Non-Binding Announcements in Public Goods Experiments: some Theory and Experimental Evidence," Dresden Discussion Paper Series in Economics 03/04, Technische Universität Dresden, Faculty of Business and Economics, Department of Economics.
    • Handle: RePEc:zbw:tuddps:0304
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    Cited by:

    1. Di Bartolomeo Giovanni & Papa Stefano, 2011. "Trust, reciprocity and altruism: An impossible addition," wp.comunite 0082, Department of Communication, University of Teramo.
    2. Zoe Van der Hoven & Martine Visser & Kerri Brick, 2012. "Contribution Norms in Heterogeneous Groups: A Climate Change Framing," SALDRU Working Papers 77, Southern Africa Labour and Development Research Unit, University of Cape Town.
    3. Thum, Marcel & Auerswald, Heike & Schmidt, Carsten & Torsvik, Gaute, 2014. "Teams Contribute More and Punish Less," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100537, Verein für Socialpolitik / German Economic Association.
    4. Yoav Wachsman, 2018. "Intragroup Communication in a Public Goods Experiment with Nested Exchanges," Economics Bulletin, AccessEcon, vol. 38(4), pages 2217-2224.
    5. Christoph Engel & Lilia Zhurakhovska, 2013. "Do Explicit Reasons Make Legal Intervention More Effective? An Experimental Study," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2013_16, Max Planck Institute for Research on Collective Goods, revised Mar 2018.

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    More about this item

    Keywords

    Public goods; Announcements; Joy of giving; Experimental economics;
    All these keywords.

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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