Voting on Thresholds for Public Goods: Experimental Evidence

Julian Rauchdobler, Rupert Sausgruber and Jean-Robert Tyran
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Julian Rauchdobler: Department of Public Economics, University of Innsbruck

No 09-27, Discussion Papers from University of Copenhagen. Department of Economics

Abstract: Introducing a threshold in the sense of a minimal project size transforms a public goods game with an inefficient equilibrium into a coordination game with a set of Pareto-superior equilibria. Thresholds may therefore improve efficiency in the voluntary provision of public goods. In our one-shot experiment, we find that coordination often fails and exogenously imposed thresholds are ineffective at best and often counter-productive. This holds under a range of threshold levels and refund rates. We test if thresholds perform better if they are endogenously chosen, i.e. if a threshold is approved in a referendum, because voting may facilitate coordination due to signaling and commitment effects. We find that voting does have signaling and commitment effects but they are not strong enough to significantly improve the efficiency of thresholds.

Keywords: provision of public goods; threshold; voting; experiments (search for similar items in EconPapers)
JEL-codes: C92 D72 H41 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2009-12
New Economics Papers: this item is included in nep-cbe, nep-cdm, nep-exp, nep-pbe, nep-pol and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Related works:
Journal Article: Voting on Thresholds for Public Goods: Experimental Evidence (2010)
Working Paper: Voting on Thresholds for Public Goods: Experimental Evidence (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:kud:kuiedp:0927

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