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Voting for burden sharing rules in public goods games

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  • Gallier, Carlo
  • Kesternich, Martin
  • Sturm, Bodo

Abstract

In this experiment, we endogenize the choice of which contribution scheme is implemented in a public goods game. We investigate three rule-based contribution schemes. In a first step, players agree on a common group provision level using the principle of the smallest common denominator. Subsequently, this group investment is allocated according to a specific rule to individual minimum contributions. The game is implemented either as a Single- or a Multi-Phase Game. In the Single-Phase Game, the contribution schemes are exogenously implemented. In the Multi-Phase Game, we let subjects vote on the rule-based contribution schemes. If a scheme obtains a sufficient majority it is implemented. In case no sufficient majority is reached, subjects have to make their contributions to the public good using the voluntary contribution mechanism (VCM). Our results suggest that the endogenous choice of a contribution scheme has an impact on the level of contributions. In case of a rule-based contribution scheme which equalizes payoffs, contributions are higher if subjects choose the scheme than in case the scheme is implemented exogenously. In contrast, contributions are higher if the VCM is implemented exogenously than in case a sufficient majority cannot be obtained and, therefore, subjects have to play the VCM.

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  • Gallier, Carlo & Kesternich, Martin & Sturm, Bodo, 2014. "Voting for burden sharing rules in public goods games," ZEW Discussion Papers 14-056, ZEW - Leibniz Centre for European Economic Research.
  • Handle: RePEc:zbw:zewdip:14056
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    Cited by:

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    2. Waichman, Israel & Requate, Till & Karde, Markus & Milinski, Manfred, 2021. "Challenging conventional wisdom: Experimental evidence on heterogeneity and coordination in avoiding a collective catastrophic event," Journal of Environmental Economics and Management, Elsevier, vol. 109(C).
    3. Gaudeul, Alexia & Keser, Claudia, 2017. "The social preferences of democratically elected decision makers and the conflict between wealth generation and distribution," University of Göttingen Working Papers in Economics 327, University of Goettingen, Department of Economics.
    4. Jacquemet, Nicolas & Luchini, Stéphane & Malézieux, Antoine, 2021. "Does voting on tax fund destination imply a direct democracy effect?," International Review of Law and Economics, Elsevier, vol. 67(C).
    5. Peter Martinsson & Emil Persson, 2019. "Public Goods and Minimum Provision Levels: Does the Institutional Formation Affect Cooperation?," Scandinavian Journal of Economics, Wiley Blackwell, vol. 121(4), pages 1473-1499, October.
    6. Morgan, Stephen N. & Mason, Nicole M. & Shupp, Robert S., 2017. "Do Stakeholder Comments Influence Regulator Behavior? Evidence from a Public Goods Experiment," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258395, Agricultural and Applied Economics Association.
    7. Marius Alt & Carlo Gallier & Martin Kesternich & Bodo Sturm, 2022. "Collective minimum contributions to counteract the ratchet effect in the voluntary provision of public goods," BEMPS - Bozen Economics & Management Paper Series BEMPS96, Faculty of Economics and Management at the Free University of Bozen.
    8. Bouma, J.A. & Nguyen, Binh & van der Heijden, Eline & Dijk, J.J., 2018. "Analysing Group Contract Design Using a Lab and a Lab-in-the-Field Threshold Public Good Experiment," Discussion Paper 2018-049, Tilburg University, Center for Economic Research.
    9. Alt, Marius & Gallier, Carlo & Kesternich, Martin & Sturm, Bodo, 2022. "Collective minimum contributions to counteract the ratchet effect in the voluntary provision of public goods," ZEW Discussion Papers 22-053, ZEW - Leibniz Centre for European Economic Research.
    10. Shaun Larcom & Terry Gevelt, 2019. "Do Voluntary Commons Associations Deliver Sustainable Grazing Outcomes? An Empirical Study of England," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(1), pages 51-74, May.
    11. Keser, Claudia & Markstädter, Andreas & Schmidt, Martin, 2014. "Mandatory minimum contributions, heterogenous endowments and voluntary public-good provision," University of Göttingen Working Papers in Economics 224, University of Goettingen, Department of Economics.
    12. Keser, Claudia & Markstädter, Andreas & Schmidt, Martin, 2017. "Mandatory minimum contributions, heterogeneous endowments and voluntary public-good provision," Games and Economic Behavior, Elsevier, vol. 101(C), pages 291-310.
    13. Christian Feige & Karl-Martin Ehrhart & Jan Krämer, 2018. "Climate Negotiations in the Lab: A Threshold Public Goods Game with Heterogeneous Contributions Costs and Non-binding Voting," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 70(2), pages 343-362, June.
    14. Morgan, Stephen N. & Mason, Nicole M. & Shupp, Robert S., 2016. "Do Open Comment Processes Increase Regulatory Compliance? Evidence from a Public Goods Experiment," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235719, Agricultural and Applied Economics Association.
    15. Gallier, Carlo & Langbein, Jörg & Vance, Colin, 2018. "Non-binding Restrictions, Cooperation, and Coral Reef Protection: Experimental Evidence from Indonesian Fishing Communities," Ecological Economics, Elsevier, vol. 150(C), pages 62-71.
    16. Morgan, Stephen N. & Mason, Nicole M. & Shupp, Robert S., 2019. "The effects of voice with(out) punishment: Public goods provision and rule compliance," Journal of Economic Psychology, Elsevier, vol. 74(C).
    17. Martin Kesternich & Christiane Reif & Dirk Rübbelke, 2017. "Recent Trends in Behavioral Environmental Economics," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 67(3), pages 403-411, July.
    18. Morgan, S. & Mason, N. & Shupp, R., 2018. "Stakeholder Comments, Contributions, and Compliance: Evidence from a Public Goods Experiment," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277122, International Association of Agricultural Economists.
    19. Claudia Keser & Andreas Markstädter & Martin Schmidt, 2014. "Mandatory minimum contributions, heterogeneous endowments and voluntary public-good provision," CIRANO Working Papers 2014s-47, CIRANO.

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    More about this item

    Keywords

    public goods; endogenous institutions; minimum contribution rules; cooperation;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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