After You - Endogenous Sequencing in Voluntary Contribution Games

CentER Discussion Paper No. 2003-98

36 Pages Posted: 16 Jun 2004

See all articles by Johannes (Jan) J. M. Potters

Johannes (Jan) J. M. Potters

Tilburg University - CentER

Martin Sefton

University of Nottingham - School of Economics

Lise Vesterlund

University of Pittsburgh - Department of Economics

Date Written: 2003

Abstract

We examine contributions to a public good when some donors do not know the true value of the good. If donors in such an environment determine the sequence of moves, two contribution orders may arise as equilibria. Either the uninformed and informed donors contribute simultaneously or the informed contribute prior to the uninformed. Sequential moves result in a larger provision of the public good, because the follower mimics the action of the leader, and in accounting for this response, the leader chooses to contribute when it is efficient to do so. An experimental investigation of the game shows that the donors predominantly choose to contribute sequentially, and that the resulting contributions are larger than those of the simultaneous-move game. Although the gain from sequential moves is smaller when the sequence is set exogenously, our results suggest that the involved parties would benefit from having sequential moves imposed upon them.

Keywords: Information, uncertainty, public goods, games

JEL Classification: C92, D82, H41

Suggested Citation

Potters, Johannes (Jan) J. M. and Sefton, Martin and Vesterlund, Lise, After You - Endogenous Sequencing in Voluntary Contribution Games (2003). CentER Discussion Paper No. 2003-98. Available at SSRN: https://ssrn.com/abstract=556588 or http://dx.doi.org/10.2139/ssrn.556588

Johannes (Jan) J. M. Potters (Contact Author)

Tilburg University - CentER ( email )

Department of Economics
P.O. Box 90153
5000 LE Tilburg
Netherlands
+31 13 466 8204 (Phone)
+31 13 466 3042 (Fax)

Martin Sefton

University of Nottingham - School of Economics ( email )

University Park
Nottingham, NG7 2RD
United Kingdom

Lise Vesterlund

University of Pittsburgh - Department of Economics ( email )

4T18 WW Posvar. Hall
Pittsburgh, PA 15260
United States

HOME PAGE: http://www.econ.iastate.edu/faculty/vesterlund/

Register to save articles to
your library

Register

Paper statistics

Downloads
63
Abstract Views
837
rank
343,819
PlumX Metrics