Combating climate change: Is the option to exploit a public good a barrier for reaching critical thresholds? Experimental evidence

Cloos, Janis and Greiff, Matthias (2021): Combating climate change: Is the option to exploit a public good a barrier for reaching critical thresholds? Experimental evidence.

Abstract

The achievement of collective climate targets is hampered by a large number of factors. Most obvious is the conflict between self-interest and group interest at both the intra- and intergenerational level. Several experimental studies examine the effects of factors such as wealth heterogeneity, varying thresholds, or time discounting on the probability of achieving a collective climate target. In these experiments, participants act as a group and can invest money in a collective group account over a fixed number of rounds. If the group account is below a threshold after the last round, the members of a group usually lose a large proportion of their potential assets. However, in the real world, agents can not only invest in public goods, but also exploit them. We therefore study cooperation dynamics in a threshold climate change experiment in which group members can not only contribute money into their group account, but also take money out of it. We induce endowment heterogeneity by simulating the contribution decisions in the first rounds of the experiment and vary the loss rate between treatments. Our results show no significant differences between give and give-take treatments. Consistent with the results of previous studies, we find that with a lower loss rate, less groups reach the threshold.

• Item Type: MPRA Paper
• Language: English
• Keywords: climate change, experiment, public goods game, threshold public goods game, exploitation
• Subjects: C - Mathematical and Quantitative Methods > C9 - Design of Experiments > C92 - Laboratory, Group Behavior; D - Microeconomics > D7 - Analysis of Collective Decision-Making > D74 - Conflict ; Conflict Resolution ; Alliances ; Revolutions; D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D81 - Criteria for Decision-Making under Risk and Uncertainty; H - Public Economics > H4 - Publicly Provided Goods > H41 - Public Goods; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q54 - Climate ; Natural Disasters and Their Management ; Global Warming

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