Public Good and Private Good Valuation for Waiting Time Reduction - A Laboratory Study

Univ. of Bremen Dept. of Economics Discussion Paper No. 004--2008

59 Pages Posted: 7 Aug 2008

See all articles by Tibor Neugebauer

Tibor Neugebauer

Leibniz Universit├Ąt Hannover - Economics and Business Administration Area

Stefan Traub

University of the German Federal Armed Forces - Department of Economics; University of the German Federal Armed Forces - DFG Research Group 2104

Date Written: July 1, 2008

Abstract

In a laboratory experiment with salient rewards, subjects were endowed with money and waiting time. Preferences for waiting time were elicited both as a private good by means of a series of second price auctions, i.e., in a non-induced values framework, and as a public good in the scope of a voluntary contribution game. Our data supports the Lindahl equilibrium as a descriptive model of behavior. Private goods valuations turned out to be good predictors of public goods valuations. Furthermore, positive expectations about other subjects' contributions lead to a significant increase of one's own contribution. We did not find evidence of waiting time being discounted.

Keywords: Private Provision of Public Goods, Nash Equilibrium, Lindahl Equilibrium, Conditional Cooperation, Experiments, Second Price Auction

JEL Classification: H41, D61, C90

Suggested Citation

Neugebauer, Tibor and Traub, Stefan, Public Good and Private Good Valuation for Waiting Time Reduction - A Laboratory Study (July 1, 2008). Univ. of Bremen Dept. of Economics Discussion Paper No. 004--2008, Available at SSRN: https://ssrn.com/abstract=1210742 or http://dx.doi.org/10.2139/ssrn.1210742

Tibor Neugebauer

Leibniz Universit├Ąt Hannover - Economics and Business Administration Area ( email )

Koenigsworther Platz 1
30167 Hannover
Germany
+49 511 762-5161 (Phone)
+49 511 762-5240 (Fax)

Stefan Traub (Contact Author)

University of the German Federal Armed Forces - Department of Economics ( email )

Holstenhofweg 85
Hamburg, 22043
Germany

University of the German Federal Armed Forces - DFG Research Group 2104 ( email )

Holstenhofweg 85
Hmaburg, DE 22043
Germany

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