Social Preferences, Beliefs, and the Dynamics of Free Riding in Public Good Experiments

37 Pages Posted: 12 Dec 2008

See all articles by Urs Fischbacher

Urs Fischbacher

University of Konstanz - Faculty of Economics and Statistics

Simon Gaechter

University of Nottingham; IZA Institute of Labor Economics; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: December 2008

Abstract

We provide a test of the role of social preferences and beliefs in voluntary cooperation and its decline. We elicit individuals' cooperation preferences in one experiment and use them - as well as subjects' elicited beliefs - to explain contributions to a public good played repeatedly. We find substantial heterogeneity in people's preferences. With simulation methods based on this data, we show that the decline of cooperation can be driven by the fact that most people have a preference to contribute less than others, rather than by their changing beliefs of others' contribution over time. Universal free riding is very likely despite the fact that most people are not selfish.

Keywords: public goods experiments, social preferences, conditional cooperation, free riding

JEL Classification: C91, C72, H41, D64

Suggested Citation

Fischbacher, Urs and Gachter, Simon, Social Preferences, Beliefs, and the Dynamics of Free Riding in Public Good Experiments (December 2008). CESifo Working Paper Series No. 2491. Available at SSRN: https://ssrn.com/abstract=1314687

Urs Fischbacher

University of Konstanz - Faculty of Economics and Statistics ( email )

Universitaetsstr. 10
78457 Konstanz
Germany

Simon Gachter (Contact Author)

University of Nottingham ( email )

University Park
Nottingham, NG8 1BB
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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