The Impact of Redistribution Mechanisms in the Vote with the Wallet Game: Experimental Results

53 Pages Posted: 3 Oct 2015

See all articles by Leonardo Becchetti

Leonardo Becchetti

University of Rome Tor Vergata - Faculty of Economics

Vittorio Pelligra

Universita di Cagliari - Department of Economics

Francesco Salustri

Health Economics Research Centre, University of Oxford

Date Written: October 2, 2015

Abstract

We use the Vote-with-the-Wallet game (VWG) to model socially or environmentally responsible consumption, an increasingly relevant but still under-researched phenomenon. Based on a theoretical model outlining game equilibria and the parametric interval of the related multiplayer prisoners’ dilemma (PD) we evaluate with a controlled lab experiment players’ behavior in the game and test the effects of an ex post redistribution mechanism between defectors and cooperators. Our findings document that the redistribution mechanism interrupts cooperation decay and stabilizes the share of cooperators at a level significantly higher, even though inferior to the Nash equilibrium.

Keywords: vote with the wallet, prisoner’s dilemma, lab experiment

JEL Classification: C72, C73, C91, M14

Suggested Citation

Becchetti, Leonardo and Pelligra, Vittorio and Salustri, Francesco, The Impact of Redistribution Mechanisms in the Vote with the Wallet Game: Experimental Results (October 2, 2015). CEIS Working Paper No. 354. Available at SSRN: https://ssrn.com/abstract=2668724 or http://dx.doi.org/10.2139/ssrn.2668724

Leonardo Becchetti (Contact Author)

University of Rome Tor Vergata - Faculty of Economics ( email )

Via Columbia, 2
I-00133 Rome
Italy

Vittorio Pelligra

Universita di Cagliari - Department of Economics ( email )

V. S. Ignazio 17
Cagliari 09123, CA 09123
Italy

Francesco Salustri

Health Economics Research Centre, University of Oxford ( email )

Department of Public Health
Old Road Campus
Oxford OX3 7LF
United Kingdom

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