Asymmetric Framing in a Public Goods Game with Asymmetric Endowments

Abstract

Individual contributions to public goods can be framed in absolute or relative metrics. We examine how the framing salience affects the contribution behavior when group members are heterogeneously endowed, based on a reference-dependent theory with salience weights allocated to the absolute or relative reference points. We test our theory through an experimental design where the framing is either uniform (absolute or relative for all players) or asymmetric for players with different endowments. We find that absolute framing incentivizes higher public goods contributions than the relative framing, while the asymmetric framing with relative for high-type and absolute for low-type members leads to increased contribution levels but more unequal distribution among members. We further discuss the competing effects of framing salience and the self-serving bias on contribution behavior. Our study contributes to a better understanding of the preference for absolute vs. relative comparisons, and provides implications for related policy designs for public goods.

Keywords: Public goods, Absolute-relative framing, Heterogeneous endowments, Reference point