COMMUNICATION and FREE-RIDING BEHAVIOR: THE VOLUNTARY CONTRIBUTION MECHANISM

Authors

  • R. Mark Isaac,

  • James M. Walker

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    • *The University of Arizona and Indiana University respectively. We would like to acknowledge the valuable comments received at presentations of preliminary work on this project. In particular, we thank Jeffrey Banks, Elizabeth Hoffman, Charles Plott, Thomas Borcherding and two referees for their helpful suggestions. Financial support from the Alfred P. Sloan Foundation and the National Science Foundation (Grants # SES 8310096, SES 8606770, and SES 8608112) is gratefully acknowledged. Data are stored on PLATO permanent files and are available from the authors upon request


Abstract

We examine experimentally the role of active communication as a mechanism for improving economic efficiency in a voluntary contribution public goods environment. With no communication this environment has been shown to induce significant subop-timality, approaching zero contributions with iteration of the decision environment. Communication is shown to improve group optimality significantly. We examine the robustness of our results in increasingly complex environments and in environments in which there has been a history of communication but active communication is no longer available.

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