Endogenous Move Structure and Voluntary Provision of Public Goods: Theory and Experiment

Authors


  • Daniele Nosenzo and Martin Sefton, School of Economics, University of Nottingham, University Park, Nottingham NG7 2RD, UK (daniele.nosenzo@nottingham.ac.uk, martin.sefton@nottingham.ac.uk).

  • We thank the editor and two referees for useful comments. We also thank audiences at the IAREP workshop on “The economic psychology of giving, public goods and leadership,” University of Kent, 2009, the Public Economic Theory workshop on “Public Economics: Theoretical and Experimental Approaches” in Lyon, 2009, the CREED-CeDEx-UEA Meeting in Norwich, 2009, and the Royal Economic Society Annual Conference, University of Surrey, 2010 and the European Economic Association Meeting, University of Glasgow, 2010 for useful comments. We thank the British Academy for supporting this research under small grant SG-44918. Daniele Nosenzo acknowledges support from the Leverhulme Trust (ECF/2010/0636).

Abstract

In this paper, we examine voluntary contributions to a public good, embedding Varian's (1994) 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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