Explaining Success Rates at Providing Threshold Public Goods: An Approach Based on Impulse Balance Theory

43 Pages Posted: 14 Aug 2013

See all articles by Federica Alberti

Federica Alberti

Max Planck Institute of Economics

Edward Cartwright

De Montfort University

Anna Stepanova

University of Kent - Canterbury Campus

Date Written: July 31, 2013

Abstract

We propose and develop a model of behavior in threshold public good games. The model draws on learning direction theory and impulse balance theory. We find good support for the model and demonstrate that it can explain the success rates observed in threshold public good experiments. The model is applied in a variety of different settings: we compare games with a full refund to those with no refund, consider changes in relative endowment, and consider changes in the step return and net reward. Theoretically grounded hypotheses are distinctly lacking in the literature and so our approach offers a big step forward in understanding behavior in threshold public good games.

Keywords: public good, threshold, learning direction theory, impulse balance theory, counterfactual thinking

JEL Classification: C72, H41, C92

Suggested Citation

Alberti, Federica and Cartwright, Edward and Stepanova, Anna, Explaining Success Rates at Providing Threshold Public Goods: An Approach Based on Impulse Balance Theory (July 31, 2013). Available at SSRN: https://ssrn.com/abstract=2309361 or http://dx.doi.org/10.2139/ssrn.2309361

Federica Alberti

Max Planck Institute of Economics ( email )

Kahlaische Stra├če 10
Jena, 07745
Germany

Edward Cartwright (Contact Author)

De Montfort University ( email )

The Gateway
Leicester, LE1 9BH
United Kingdom

Anna Stepanova

University of Kent - Canterbury Campus ( email )

School of Politics and International Relations
Rutherford College
Canterbury, CT2 7NX

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