Real-time Monitoring in a Public-Goods Game

34 Pages Posted: 30 Mar 2020 Last revised: 22 Oct 2020

See all articles by Simin He

Simin He

Shanghai University of Finance and Economics - School of Economics

Xun Zhu

Fudan University - School of Management

Date Written: Oct 22, 2020

Abstract

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

He, Simin and Zhu, Xun, Real-time Monitoring in a Public-Goods Game (Oct 22, 2020). Available at SSRN: https://ssrn.com/abstract=3548418 or http://dx.doi.org/10.2139/ssrn.3548418

Simin He (Contact Author)

Shanghai University of Finance and Economics - School of Economics ( email )

777 Guoding Road
Shanghai, 200433
China

Xun Zhu

Fudan University - School of Management ( email )

Shanghai
China

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