Information Regime Changes and Path Dependence - An Experimental Analysis of Public Goods Contributions in Heterogeneous Groups

Abstract

We experimentally investigate the path dependence of voluntary contributions in a public good game with heterogeneous agents who vary in their ability to increase the public good. More specifically, we analyze whether contribution norms observed in a first phase of the experiment under a specific information regime carry over to a second phase with a more or a less transparent regime. We find evidence of path dependence that varies by the ability of agents. Efficient contribution norms establish under common knowledge about heterogeneity and transparency of contributors' ability, and they carry over to another game with less transparency. Other contribution norms that emerged under less transparency are also initially sticky, but they eventually evolve toward an efficient norm under a more transparent information regime. Thus, path dependence may impede but does not prevent ecient contribution norms to prevail in fully transparent settings.

Keywords: Voluntary Contribution Mechanism, Heterogeneous MPCR, Information Transparency, Sticky Behavior, Behavioral Change, Social Norms

JEL Classification: C92, D04, D63, D79, D89, D91, H41, H49