Social Value Orientation and Group Size Uncertainty in Public Good Dilemmas

38 Pages Posted: 23 Jun 2018

See all articles by Wladislaw Mill

Wladislaw Mill

University of Mannheim - Department of Economics

Maik Theelen

RWTH Aachen University - School of Economics and Business Administration

Date Written: June 10, 2018

Abstract

Risk and uncertainty are an integral part of everyday human interactions. Recent literature has shown that group size uncertainty might change strategic cooperation behavior in significant ways. In this paper, we investigate how conditional cooperation changes under group size uncertainty in a linear public good game where the selfish rational strategy is kept constant. Further, we suggest an underlying mechanism that consists of beliefs and group size estimation. We show that interpersonal differences (i.e., Social Value Orientation) are essential in how this mechanism operates. More specifically, we find that prosocials contribute more under uncertainty compared to certainty, whereas proselfs do not change their behavior. Given the same feedback proselfs estimated the group size to be bigger than prosocials, resulting in a smaller contribution belief. These results imply that interpersonal differences are important in explaining cooperation under uncertainty compared to certainty.

Keywords: Group Size Uncertainty; Public Good Experiment; Social Dilemma; Social Value Orientation; Social Preferences

JEL Classification: C92; H41

Suggested Citation

Mill, Wladislaw and Theelen, Maik, Social Value Orientation and Group Size Uncertainty in Public Good Dilemmas (June 10, 2018). Available at SSRN: https://ssrn.com/abstract=3193594 or http://dx.doi.org/10.2139/ssrn.3193594

Wladislaw Mill (Contact Author)

University of Mannheim - Department of Economics ( email )

D-68131 Mannheim
Germany

Maik Theelen

RWTH Aachen University - School of Economics and Business Administration ( email )

Aachen
Germany

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