Delegation and Public Pressure in a Threshold Public Goods Game: Theory and Experimental Evidence

78 Pages Posted: 22 Mar 2016

See all articles by Doruk İriş

Doruk İriş

Sogang University

Jungmin Lee

Seoul National University

Alessandro Tavoni

University of Bologna; London School of Economics & Political Science (LSE)

Date Written: March 22, 2016

Abstract

The provision of global public goods, such as climate change mitigation and managing fisheries to avoid overharvesting, requires the coordination of national contributions. The contributions are managed by elected governments who, in turn, are subject to public pressure on the matter. In an experimental setting, we randomly assign subjects into four teams, and ask them to elect a delegate by a secret vote. The elected delegates repeatedly play a one shot public goods game in which the aim is to avoid losses that can ensue if the sum of their contributions falls short of a threshold. Earnings are split evenly among the team members, including the delegate. We find that delegation causes a small reduction in the group contributions. Public pressure, in the form of teammates’ messages to their delegate, has a significant negative effect on contributions, even though the messages are designed to be payoff-inconsequential (i.e., cheap talk). The reason for the latter finding is that delegates tend to focus on the least ambitious suggestion. In other words, they focus on the lower of the two public good contributions preferred by their teammates. This finding is consistent with the prediction of our model, a modified version of regret theory.

Keywords: Delegation, Cooperation, Threshold Public Goods Game, Climate Experiment, Regret Theory

JEL Classification: C72, C92, D81, H4, Q54

Suggested Citation

İriş, Doruk and Lee, Jungmin and Tavoni, Alessandro, Delegation and Public Pressure in a Threshold Public Goods Game: Theory and Experimental Evidence (March 22, 2016). FEEM Working Paper No. 26.2016, Available at SSRN: https://ssrn.com/abstract=2752895 or http://dx.doi.org/10.2139/ssrn.2752895

Doruk İriş

Sogang University

Seoul 121-742
Korea, Republic of (South Korea)

Jungmin Lee

Seoul National University ( email )

Kwanak-gu
Seoul, 151-742
Korea, Republic of (South Korea)

Alessandro Tavoni (Contact Author)

University of Bologna ( email )

Bologna
Italy
0512098485 (Phone)
40100 (Fax)

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

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