Cognitive ability and the house money effect in public goods games

Julian Hackinger

Journal of the Economic Science Association, 2024, vol. 10, issue 2, No 12, 393-414

Abstract: Abstract I experimentally investigate the relation of endowment origin, cognitive abilities (as measured by the Cognitive Reflection Test, CRT), and co-operation in a one-shot linear public goods game. The results show that subjects’ contributions depend on an interplay of cognitive abilities and endowment origin. A house money effect exists only for subjects with low CRT scores. They contribute more when income was allocated to them and less when income was obtained by effort. In contrast, subjects with high CRT scores contribute the same amount independent of income type. The findings have implications for redistribution, team production, and experimental designs.

Keywords: Public goods game; Cognitive reflection; House money; Real effort; Income source (search for similar items in EconPapers)
JEL-codes: C91 D03 H41 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s40881-024-00163-9

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