Coordination Under Threshold Uncertainty in a Public Goods Game

Ca’ Foscari University of Venice Economics Working Paper No. 20

48 Pages Posted: 24 Nov 2011

See all articles by Astrid Dannenberg

Astrid Dannenberg

University of Gothenburg

Andreas Löschel

University of Muenster - Chair of Microeconomics, esp. Energy and Resource Economics

Gabriele Paolacci

Erasmus University - Rotterdam School of Management

Christiane Reif

ZEW – Leibniz Centre for European Economic Research - Environmental and Resource Economics, Environmental Management Research

Alessandro Tavoni

London School of Economics & Political Science (LSE); Princeton University - Department of Ecology and Evolutionary Biology; Fondazione Eni Enrico Mattei (FEEM)

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Date Written: November 22, 2011

Abstract

We explored experimentally how threshold uncertainty affects coordination success in a threshold public goods game. Whereas all groups succeeded in providing the public good when the exact value of the threshold was known, uncertainty was generally detrimental for the public good provision. The negative effect of threshold uncertainty was particularly severe when it took the form of ambiguity, i.e. when players were not only unaware of the value of the threshold but also of its probability distribution. Early signaling of willingness to contribute and share the burden equitably helped groups in coping with threshold uncertainty.

Keywords: public good, threshold uncertainty, ambiguity, experiment

JEL Classification: C72, C92, H41, Q54

Suggested Citation

Dannenberg, Astrid and Löschel, Andreas and Paolacci, Gabriele and Reif, Christiane and Tavoni, Alessandro, Coordination Under Threshold Uncertainty in a Public Goods Game (November 22, 2011). Ca’ Foscari University of Venice Economics Working Paper No. 20, Available at SSRN: https://ssrn.com/abstract=1963187 or http://dx.doi.org/10.2139/ssrn.1963187

Astrid Dannenberg

University of Gothenburg ( email )

Viktoriagatan 30
Göteborg, 405 30
Sweden

Andreas Löschel

University of Muenster - Chair of Microeconomics, esp. Energy and Resource Economics ( email )

Universitätsstr. 14-16
48143 Munster
Germany

HOME PAGE: http://www.wiwi.uni-muenster.de/eroe

Gabriele Paolacci (Contact Author)

Erasmus University - Rotterdam School of Management ( email )

3000 DR Rotterdam
Netherlands

Christiane Reif

ZEW – Leibniz Centre for European Economic Research - Environmental and Resource Economics, Environmental Management Research ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim
Germany

Alessandro Tavoni

London School of Economics & Political Science (LSE) ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

HOME PAGE: http://www2.lse.ac.uk/GranthamInstitute/whosWho/Staff/AlessandroTavoni.aspx

Princeton University - Department of Ecology and Evolutionary Biology ( email )

Princeton, NJ 08544
United States

Fondazione Eni Enrico Mattei (FEEM) ( email )

C.so Magenta 63
Milano, 20123
Italy

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