External Matching Funds and the Provision of Public Goods: An Experimental Study

37 Pages Posted: 21 Feb 2010 Last revised: 3 Mar 2010

Ronald J. Baker II

Millersville University - Economics

James M. Walker

Indiana University - Department of Economics and Workshop in Political Theory and Policy Analysis

Arlington W. Williams

Indiana University Bloomington - Department of Economics

Date Written: February 1, 2010

Abstract

The voluntary provision of a pure public good is studied in the presence of an anonymous external donor. New data generated using experimental procedures employing both extra-credit and cash incentives, as well as asynchronous access to real-time decision rounds lasting several days, are compared to previous data generated using traditional cash-only, synchronous-access laboratory procedures. The effect on resource allocations to the public good of introducing external matching funds is examined in two different settings, lump-sum matching and one-to-one matching. The new data confirm the robustness of results previously reported by the authors to the change in laboratory procedures and incentives. The new data are then used to extend the parameter space in which the two matching mechanisms are studied, including: varying within-round information regarding the current level of public-good allocations, varying the marginal rate of return from the public good, and varying group size from four to twenty group members.

JEL Classification: C91, H41

Suggested Citation

Baker, Ronald J. and Walker, James M. and Williams, Arlington W., External Matching Funds and the Provision of Public Goods: An Experimental Study (February 1, 2010). Available at SSRN: https://ssrn.com/abstract=1555871 or http://dx.doi.org/10.2139/ssrn.1555871

Ronald J. Baker II (Contact Author)

Millersville University - Economics ( email )

Millersville, PA 17554
United States

James M. Walker

Indiana University - Department of Economics and Workshop in Political Theory and Policy Analysis ( email )

Wylie Hall 105
Bloomington, IN 47405
United States
812-855-2760 (Phone)
812-855-3736 (Fax)

Arlington W. Williams

Indiana University Bloomington - Department of Economics ( email )

Wylie Hall 105
Bloomington, IN 47405-6620
United States
812-855-4564 (Phone)
812-855-3736 (Fax)

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