Real-time Monitoring in a Public-Goods Game
34 Pages Posted: 30 Mar 2020 Last revised: 22 Oct 2020
Date Written: Oct 22, 2020
We investigate a novel continuous-time mechanism in a public-goods game. Within a fixed period, a clock ensures that contributions increase simultaneously for every player, and players can choose when to stop, while their actions are observed by others in real time. We show both theoretically and experimentally that this mechanism is very effective in improving the contribution. Three critical factors may play a role: cheap talk, incremental commitment, and the clock. We further decompose these factors and find that cheap talk alone is not effective, while incremental commitment and the clock each account for 60% and 40% of the total effect, respectively.
Keywords: public goods, continuous time, incremental commitment, cheap talk
JEL Classification: C72, C92, D82
Suggested Citation: Suggested Citation