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CeDEx 2010-14: Endogenous Move Structure and Voluntary Provision of Public Goods: Theory and Experiment

Abstract

In this paper we examine voluntary contributions to a public good, embedding Varian (1994)’s voluntary contribution game in extended games that allow players to choose the timing of their contributions. We show that predicted outcomes are sensitive to the structure of the extended game, and also to the extent to which players care about payoff inequalities. We then report a laboratory experiment based on these extended games. We find that behavior is similar in the two extended games: subjects avoid the detrimental move order of Varian’s model, where a person with a high value of the public good commits to a low contribution, and instead players tend to delay contributions. These results suggest that commitment opportunities may be less damaging to public good provision than previously thought.

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Revised version of 2009-09

Now published in Journal of Public Economic Theory 2012; 51:435-463

Authors

Daniele Nosenzo and Martin Sefton

 

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Posted on Sunday 1st August 2010

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