Cost-(in)effective public good provision: an experimental exploration

Nathan Chan, Stephen Knowles (), Ronald Peeters and Leonard Wolk ()
Additional contact information
Stephen Knowles: University of Otago
Leonard Wolk: Vrije Universiteit Amsterdam

Theory and Decision, 2024, vol. 96, issue 3, No 3, 397-442

Abstract: Abstract This paper investigates the determinants of cost-(in)effective giving to public goods. We conduct a pre-registered experiment to elucidate how factors at the institutional and individual levels shape individual contributions and the cost-effectiveness of those contributions in a novel public good game. In particular, we examine the role of consequential uncertainty over the value of public good contributions (institutional level) as well as individual characteristics like risk and ambiguity attitudes, giving type, and demographics (individual level). We find cost-ineffective contributions in all institutions, but total contribution levels and the degree of cost-ineffectiveness are similar across institutions. Meanwhile, cost-effectiveness varies by giving type—which is a novel result that is consistent with hypotheses we generate from theory—but other individual characteristics have little influence on the cost-effectiveness of contributions. Our work has important positive and normative implications for charitable giving and public good provision in the real world, and it is particularly germane to emerging online crowdfunding and patronage platforms that confront users with a multitude of competing opportunities for giving.

Keywords: Risk; Ambiguity; Cost-effectiveness; Public goods; Charity (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://link.springer.com/10.1007/s11238-023-09956-6 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
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:kap:theord:v:96:y:2024:i:3:d:10.1007_s11238-023-09956-6

Ordering information: This journal article can be ordered from
http://www.springer. ... ry/journal/11238/PS2

DOI: 10.1007/s11238-023-09956-6

Access Statistics for this article

Theory and Decision is currently edited by Mohammed Abdellaoui

More articles in Theory and Decision from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().