An Explanation of (First Round) Contributions in Public-Good Experiments

34 Pages Posted: 5 Nov 2014

See all articles by Joachim Weimann

Joachim Weimann

Otto-von-Guericke-Universität Magdeburg

Jeannette Brosig-Koch

University of Duisburg-Essen - Department of Economics and Business Administration

Timo Heinrich

Technical University Hamburg-Harburg (TUHH)

Heike Hennig‐Schmidt

University of Bonn - Laboratory for Experimental Economics

Claudia Keser

University of Goettingen (Göttingen)

Christian Stahr

Otto-von-Guericke-Universität Magdeburg

Date Written: October 24, 2014

Abstract

The dynamics of behavior observed in standard public-good experiments can be explained by imperfect conditional cooperation combined with social learning (Fischbacher and Gächter, 2010). But it is unclear what determines first-round contributions. We argue that first-round contributions depend on the difference between the actual marginal per capita return (MPCR) and the minimal MPCR necessary to create a social dilemma for the given group size. We use a novel connected-lab design that allows members of large groups to simultaneously interact under laboratory conditions. In total, 5,220 subjects participated in our experiment in groups of up to 100 subjects. The results confirm that first-round contributions increase with the MPCR distance. This effect carries over to contributions made in subsequent rounds. Our results demonstrate that small groups behave similar to large groups and that the salience of the di-lemma situation is of great importance for contributions made to the public good.

Keywords: public-good experiments, large group size, connected-lab design, salience of the dilemma situation, social learning

JEL Classification: C910, C720

Suggested Citation

Weimann, Joachim and Brosig-Koch, Jeannette and Heinrich, Timo and Henning-Schmidt, Heike and Keser, Claudia and Stahr, Christian, An Explanation of (First Round) Contributions in Public-Good Experiments (October 24, 2014). CESifo Working Paper Series No. 5039, Available at SSRN: https://ssrn.com/abstract=2519437 or http://dx.doi.org/10.2139/ssrn.2519437

Joachim Weimann (Contact Author)

Otto-von-Guericke-Universität Magdeburg ( email )

Universitätspl. 2
PSF 4120
Magdeburg, D-39106
Germany

Jeannette Brosig-Koch

University of Duisburg-Essen - Department of Economics and Business Administration ( email )

Universitätsstr. 9
Essen, 45141
Germany

Timo Heinrich

Technical University Hamburg-Harburg (TUHH) ( email )

Schwarzenbergstrasse 95
Hamburg, DE Hamburg D-21071
Germany

Heike Henning-Schmidt

University of Bonn - Laboratory for Experimental Economics ( email )

Adenauerallee 24-42
Bonn, 53113
Germany

Claudia Keser

University of Goettingen (Göttingen) ( email )

Platz der Göttinger Sieben 3
Göttingen, 37073
Germany

Christian Stahr

Otto-von-Guericke-Universität Magdeburg ( email )

Universitätspl. 2
PSF 4120
Magdeburg, D-39106
Germany

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