Does Heterogeneity Spoil the Basket? The Role of Productivity and Feedback Information on Public Good Provision

Andrej Angelovski, Daniela Di Cagno, Werner Güth (), Francesca Marazzi and Luca Panaccione

No 1604, Working Papers CESARE from Dipartimento di Economia e Finanza, LUISS Guido Carli

Abstract: In a circular neighborhood of eight, each member contributes repeatedly to two asymmetric (i.e. with different freeriding incentives) local public goods, one with the left and one with the right neighbor. All two-person public good games provide only local feedback information and are structurally independent in spite of their overlapping player sets. Here heterogeneity across neighbors is induced by two randomly selected members, named "Bad" Apples, who are either less productive or excluded from periodic information feedback about their payoffs and neighbors' contributions. Although the presence of both "Bad" Apple types leads to the neighborhood, as a whole, evolving less cooperatively, the way in which it spreads is quite different. While less productive "Bad" Apples directly initiate the spoiling of the basket due to their low contributions, "Bad" Apples excluded from periodic information are exploited by their neighbors. Furthermore, we find evidence that "Bad" Apples' positioning affects contributions in the neighborhood.

Keywords: Public goods; behavioral spillovers; experiments; voluntary contribution mechanism; heterogeneity. (search for similar items in EconPapers)
JEL-codes: C72 C91 H41 (search for similar items in EconPapers)
Date: 2016-10
New Economics Papers: this item is included in nep-cbe, nep-cdm, nep-exp, nep-gth and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Journal Article: Does heterogeneity spoil the basket? The role of productivity and feedback information on public good provision (2018)
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