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Step-Level Public Goods: Experimental Evidence

Author

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  • Rau, Holger Andreas
  • Normann, Hans-Theo

Abstract

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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    More about this item

    Keywords

    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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