Voluntary Association in Public Goods Experiments: Reciprocity, Mimicry, and Efficiency
Brown U, Economics Working Paper No. 02-19
44 Pages Posted: 20 Jun 2002
Date Written: May 2002
We study the incentive effects of endogenous group formation in a voluntary contribution experiment. Subjects are given information on the past contributions of others and allowed to express a preference for partners. On the basis of the stated preferences, new groups are formed. We find that the opportunity to form new groups increases both contributions and efficiency. We also compare the regrouping mechanism with a mechanism allowing targeted reductions of others' earnings ("punishment"). In the experiment, both mechanisms increase contribution levels significantly, but only endogenous grouping or the combination of the two increase efficiency significantly.
Keywords: Public goods, collective action, group formation, reciprocity
JEL Classification: C91, H41, D23
Suggested Citation: Suggested Citation