Framing Effects in Public Goods: Prospect Theory and Experimental Evidence

Iñigo Iturbe Ormaetxe (iturbe@merlin.fae.ua.es), Giovanni Ponti (giuba@ua.es), Josefa Tomás and Luis Ubeda
Additional contact information
Iñigo Iturbe Ormaetxe: Universidad de Alicante
Josefa Tomás: Universidad de Alicante
Luis Ubeda: Universidad de Alicante
Authors registered in the RePEc Author Service: Inigo Iturbe-Ormaetxe

Working Papers. Serie AD from Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie)

Abstract: This paper studies, both theoretically and experimentally, frame effects in the context of a public good game in which players have to make a costly contribution either i) to achieve or ii) not to lose a non excludable monetary prize. Our protocol leads to public good provision (not deterioration) only if a certain contribution level is achieved. Since both frames differ with respect to the reference point, we use Prospect Theory to derive testable predictions. In particular, Prospect Theory predicts more contribution in the second frame. Our evidence suggests that a) subjects¿ behavior is highly sensitive to frames and b) the theoretical prediction is confirmed except when the threshold is low. We also estimate the parameters which better suit our experimental evidence, partly confirming previous results in the literature.

Keywords: Public goods provision; framing; prospect theory (search for similar items in EconPapers)
JEL-codes: C92 D81 H40 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2008-10
New Economics Papers: this item is included in nep-exp, nep-pbe and nep-upt
References: Add references at CitEc
Citations: View citations in EconPapers (5)

Published by Ivie

Downloads: (external link)
http://www.ivie.es/downloads/docs/wpasad/wpasad-2008-15.pdf Fisrt version / Primera version, 2008 (application/pdf)

Related works:
Journal Article: Framing effects in public goods: Prospect Theory and experimental evidence (2011)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ivi:wpasad:2008-15

Access Statistics for this paper

More papers in Working Papers. Serie AD from Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie) Contact information at EDIRC.
Bibliographic data for series maintained by Departamento de Edición (edicion@ivie.es).