Can Non-Binding Promises Increase Cooperation in a Voluntary Contribution Mechanism Game? An Experiment

24 Pages Posted: 11 Mar 2018

See all articles by Sara le Roux

Sara le Roux

Oxford Brookes University - Department of Economics

Lawrence Choo

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg - Department of Economics

Date Written: March 2, 2018

Abstract

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

le Roux, Sara and Choo, Lawrence, Can Non-Binding Promises Increase Cooperation in a Voluntary Contribution Mechanism Game? An Experiment (March 2, 2018). Available at SSRN: https://ssrn.com/abstract=3138077 or http://dx.doi.org/10.2139/ssrn.3138077

Sara Le Roux (Contact Author)

Oxford Brookes University - Department of Economics ( email )

Oxford Brookes Business School
Headington Campus
Oxford, OX3 0BP
United Kingdom

HOME PAGE: http://saraleroux.weebly.com/

Lawrence Choo

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg - Department of Economics ( email )

Lange Gasse 20
Nuernberg, D-90403
Germany

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