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Heterogeneity and Cooperation in Privileged Groups: The Role of Capability and Valuation on Public Goods Provision

Felix Koelle
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Felix Koelle: CGS, University of Cologne

Authors registered in the RePEc Author Service: Felix Kölle ()

No 03-08, Cologne Graduate School Working Paper Series from Cologne Graduate School in Management, Economics and Social Sciences

Abstract: We experimentally investigate cooperation in privileged groups which according to Olson (1965) are groups in which at least one member has an incentive to supply a positive amount of the public good. More specifically, we analyze group member heterogeneity with respect to two dimensions: capability and valuation. Our results reveal that with and without punishment opportunities, heterogeneity crucially affects cooperation and coordination within groups. Compared to non-privileged groups, asymmetric valuations for the public good have negative effects, and asymmetric capabilities in providing the public good have positive effects on voluntary contributions. The main reason for these results are the different externalities contributions have on the other group members' payoffs affecting individuals' willingness to cooperate. Hence, whether heterogeneity facilitates or impedes collective action, and whether privileged groups are as privileged as they initially seem is subject to the nature of their asymmetry.

Keywords: Public goods; heterogeneity; privileged groups; inequality; cooperation; punishment (search for similar items in EconPapers)
JEL-codes: H41 D63 C92 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cbe and nep-exp
Date: 2012-07
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