Voluntary Cooperation in Local Public Goods Provision: An Experimental Study

41 Pages Posted: 16 Jan 2016

See all articles by Andrej Angelovski

Andrej Angelovski

Middlesex University

Daniela Di Cagno

LUISS, Rome

Werner Güth

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Research on Collective Goods; Luiss Guido Carli University

Francesca Marazzi

CEIS, University of Rome Tor Vergata

Luca Panaccione

University of Rome Tor Vergata

Date Written: January 5, 2016

Abstract

In a circular neighborhood with each member having a left and a right neighbor, individuals choose two contribution levels, one each for the public good shared with the left, respectively right, neighbor. This allows for general free riders, who do not contribute at all, and general cooperators, who contribute to both local public goods, as well as for differentiating contributors who contribute in a discriminatory way. Although the two-person local public good games are structurally independent, we investigate whether intra- as well as inter-personal spillover effects arise. We find that participants do not behave as if they are playing two separate public good games, hence that both inter-personal and intra-personal behavioral spillovers occur. To investigate more clearly motives for voluntary cooperation via analyzing individual adaptations in playing two structurally independent games, we design treatments differing in cooperation incentives (i.e. different MPCR) and structural (a)symmetry of local public goods. We find that when the MPCR is asymmetric, free-riding occurs less, and contributions are more stable over time. We also find that contributions in the asymmetric treatment when MPCR is low are higher than contributions in symmetric treatments with higher MPCR.

Keywords: Public Good, Neighborhoods, Experiments, Voluntary Contribution Mechanism

JEL Classification: C91, C72, H41

Suggested Citation

Angelovski, Andrej and Di Cagno, Daniela and Güth, Werner and Marazzi, Francesca and Panaccione, Luca, Voluntary Cooperation in Local Public Goods Provision: An Experimental Study (January 5, 2016). Available at SSRN: https://ssrn.com/abstract=2715532 or http://dx.doi.org/10.2139/ssrn.2715532

Andrej Angelovski (Contact Author)

Middlesex University ( email )

London
United Kingdom

Daniela Di Cagno

LUISS, Rome ( email )

00162 Rome, Roma
Italy

HOME PAGE: http://www.luiss.it/facolta/insegnamenti/curriculu

Werner Güth

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Research on Collective Goods

Kurt-Schumacher-Str. 10
D-53113 Bonn, 53113
Germany

Luiss Guido Carli University ( email )

Via O. Tommasini 1
Rome, Roma 00100
Italy

Francesca Marazzi

CEIS, University of Rome Tor Vergata ( email )

Via Columbia 2
Rome, Lazio 00133
Italy

Luca Panaccione

University of Rome Tor Vergata ( email )

via Columbia 2
Rome, IA Rome 00133
Italy

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