Interior Collective Optimum in a Volontary Contribution to a Public-Goods Game : An Experimental Approach

Hichri, Walid (2004): Interior Collective Optimum in a Volontary Contribution to a Public-Goods Game : An Experimental Approach. Published in: Applied Economics Letters , Vol. 11, No. 3 (2004): pp. 135-140.

Abstract

We run a public good experiment with four different treatments. The payoff function is chosen such that the Nash equilibrium (NE) and the collective optimum (CO) are both in the interior of the strategy space. We try to test the effect of varying the level of the collective optimum, which changes the "social dilemma", involved in the decision as to how much to contribute to the public good . Our results show that contributions increase with the level of the interior CO. There is overcontribution in comparison to the NE and under contribution in comparison to the CO. But contributions are as far from the CO as the level of this former gets high. An overcontribution index that takes into account the effective contribution relative to both, the NE and the CO, shows that subjects adopt a constant behavior while passing from one treatment to another: they contribute a constant share of the CO.

• Item Type: MPRA Paper
• Language: English
• Keywords: Public Goods, Experiments, Interior Solutions, Social Dilemma
• Subjects: C - Mathematical and Quantitative Methods > C9 - Design of Experiments > C92 - Laboratory, Group Behavior; H - Public Economics > H4 - Publicly Provided Goods > H41 - Public Goods; C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C72 - Noncooperative Games

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