Social Value Orientation and Group Size Uncertainty in Public Good Dilemmas

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