'Expressive' Obligations in Public Good Games: Crowding-In and Crowding-Out Effects
University of Padua - Department of Economics; Bocconi University - Department of Economics
affiliation not provided to SSRN
Università Ca' Foscari, Venezia - Department of Economics and SSE
March 5, 2010
University Ca' Foscari of Venice, Dept. of Economics Research Paper Series No. 04_10
We study individual behaviour in a repeated linear public good experiment in which, in each period, subjects are required to contribute a minimum level and face a certain probability to be audited. Audited subjects who contribute less than the minimum level are convicted to pay the difference between the obligation required and the voluntary contribution. We study the 'expressive' power of the obligations. While at early stages subjects contribute the minimum level, with repetition contributions decline below the required amount indicating that expressive obligations are not capable to sustain cooperation. We observe that expressive obligations exert a rather robust crowding-out effect on voluntary contributions as compared to a standard public good game. The crowding-out is stronger when payments collected by the monitoring activity are distributed to subjects rather than when they are pure dead-weight-loss.
The work was supported by a grant from MIUR (Ministero dell’Istruzione, dell’Università e della Ricerca).
Number of Pages in PDF File: 24
Keywords: Expressive law, motivation crowding theory, laboratory experiments
JEL Classification: C91, H26, H41, K40working papers series
Date posted: June 5, 2010
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