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Step-Level Public Goods: Experimental Evidence


  • Rau, Holger Andreas
  • Normann, Hans-Theo


We analyze the provision of a step-level public good in an experiment. Specifically, we investigate how the order of moves and the introduction of a second step-level affects public-good provision. We find that the sequential-move game improves public-good provision and payoffs. An additional step-level does lead to higher contributions but the effect on public-good provision is ambiguous and insignificant. Based on an existing data set, we calibrate Fehr and Schmidt's (1999) model of inequality aversion and find that actual behavior fits remarkably well with these predictions in a quantitative sense, but there are also two contradictions to the model's predictions.

Suggested Citation

  • Rau, Holger Andreas & Normann, Hans-Theo, 2011. "Step-Level Public Goods: Experimental Evidence," Annual Conference 2011 (Frankfurt, Main): The Order of the World Economy - Lessons from the Crisis 48710, Verein für Socialpolitik / German Economic Association.
  • Handle: RePEc:zbw:vfsc11:48710

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    References listed on IDEAS

    1. Frederick C. Mills, 1927. "Introduction to "The Behavior of Prices"," NBER Chapters,in: The Behavior of Prices, pages 31-36 National Bureau of Economic Research, Inc.
    2. Logue, Dennis E & Willett, Thomas D, 1976. "A Note on the Relation between the Rate and Variability of Inflation," Economica, London School of Economics and Political Science, vol. 43(17), pages 151-158, May.
    3. Vining, Daniel R, Jr & Elwertowski, Thomas C, 1976. "The Relationship between Relative Prices and the General Price Level," American Economic Review, American Economic Association, vol. 66(4), pages 699-708, September.
    4. Frederick C. Mills, 1927. "The Behavior of Prices," NBER Books, National Bureau of Economic Research, Inc, number mill27-1, January.
    5. Lucas, Robert E, Jr, 1973. "Some International Evidence on Output-Inflation Tradeoffs," American Economic Review, American Economic Association, vol. 63(3), pages 326-334, June.
    6. Laurence Ball & N. Gregory Mankiw, 1995. "Relative-Price Changes as Aggregate Supply Shocks," The Quarterly Journal of Economics, Oxford University Press, vol. 110(1), pages 161-193.
    7. Michael F. Bryan & Stephen G. Cecchetti, 1999. "Inflation And The Distribution Of Price Changes," The Review of Economics and Statistics, MIT Press, vol. 81(2), pages 188-196, May.
    8. Kim, Tae-Hwan & White, Halbert, 2004. "On more robust estimation of skewness and kurtosis," Finance Research Letters, Elsevier, vol. 1(1), pages 56-73, March.
    9. Frederick C. Mills, 1927. "Appendix to "The Behavior of Prices"," NBER Chapters,in: The Behavior of Prices, pages 441-586 National Bureau of Economic Research, Inc.
    10. Stanley Fischer, 1981. "Relative Shocks, Relative Price Variability, and Inflation," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 12(2), pages 381-442.
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    More about this item


    Experimental economics; sequential play; step-level public good;

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods


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