Complementarity in the Private Provision of Public Goods by Homo Pecuniarius and Homo Behavioralis
Guidon Fenig,
Giovanni Gallipoli (gallipol@mail.ubc.ca) and
Yoram Halevy
Microeconomics.ca working papers from Vancouver School of Economics
Abstract:
We examine coordination in private provision of public goods when agents' contributions are complementary. When complementarity is sufficiently high an additional full-contribution equilibrium emerges. We experimentally investigate subjects’ behavior using a between-subject design that varies complementarity. When two equilibria exist, subjects coordinate on the full-contribution equilibrium. When complementarity is sizable but only a zero-contribution equilibrium exists, subjects persistently contribute above it. Observed choices and and other nonchoice data indicate heterogeneity among subjects and two distinct types. Homo pecuniarius maximizes profits by best-responding to beliefs, while Homo behavioralis identifies this strategy but chooses to deviate from it – sacrificing pecuniary rewards to support altruism or competitiveness.
Keywords: Public goods; Voluntary Contribution Mechanism; Complementarity; Coordination; Altruism; Competitiveness; Warm-Glow; Joy of Winning; Laboratory Experi (search for similar items in EconPapers)
JEL-codes: C72 C92 D03 D83 H41 (search for similar items in EconPapers)
Pages: 60 pages
Date: 2015-11-15, Revised 2016-05-02
New Economics Papers: this item is included in nep-gth
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Persistent link: https://EconPapers.repec.org/RePEc:ubc:pmicro:yoram_halevy-2015-21
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