Can Non-Binding Promises Increase Cooperation in a Voluntary Contribution Mechanism Game? An Experiment
24 Pages Posted: 11 Mar 2018
Date Written: March 2, 2018
We consider a modiﬁed voluntary contributions mechanism (VCM) game where the marginal per capita return (mpcr) for a group of responders is endogenously determined by the proposer. We allow the proposer to implement a mpcr that is diﬀerent to the mpcr initially announced, after observing responders’ contributions. Thus, the mpcr used to determine responders’ payoﬀs may diﬀer from the mpcr that was public information when responders decided their contributions. Our ﬁndings indicate that contributions increase with the announced mpcr even when the announced mpcr is non-binding. This suggests that promising a high mpcr in VCM type interactions can be successful at increasing individuals’ contributions even if the eventual mpcr that determines payoﬀ is substantially lower. Finally, we ﬁnd that the marginal gains from the above strategy can be expected to decrease with experience.
Suggested Citation: Suggested Citation