Competition for Status Acquisition in Public Good Games

24 Pages Posted: 2 May 2007 Last revised: 6 May 2008

See all articles by Felix Munoz-Garcia

Felix Munoz-Garcia

Washington State University - School of Economic Sciences

Date Written: May 6, 2008

Abstract

This paper examines the role of status acquisition as a motive for giving in voluntary contributions to public goods. In particular, every donor's status is given by the difference between his contribution and that of the other donor. Specifically, I show that contributors give more than in standard models where status is not considered, and their donation is increasing in the value they assign to status. In addition, players' contributions are increasing in the value that their opponents assign to status, reflecting donors' intense competition to gain social status. Furthermore, I consider contributors' equilibrium strategies both in simultaneous and sequential contribution mechanisms. Then, I compare total contributions in both of these mechanisms. I find that the simultaneous contribution order generates higher total contributions than the sequential mechanism only when donors are sufficiently homogeneous in the value they assign to status. Otherwise, the sequential mechanism generates the highest contributions.

Keywords: Public goods games, Status acquisition, Competition

JEL Classification: C7, H41

Suggested Citation

Munoz-Garcia, Felix, Competition for Status Acquisition in Public Good Games (May 6, 2008). Available at SSRN: https://ssrn.com/abstract=983749 or http://dx.doi.org/10.2139/ssrn.983749

Felix Munoz-Garcia (Contact Author)

Washington State University - School of Economic Sciences ( email )

P.O. Box 646210
Hulbert Hall 101
Pullman, WA 99164-6210
United States

HOME PAGE: http://www.ses.wsu.edu/People/munoz.htm

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