Provision of Multilevel Public Goods by Positive Externalities: Experimental Evidence

Werner Güth () and Lauri Sääksvuori

The B.E. Journal of Economic Analysis & Policy, 2012, vol. 12, issue 1, 33

Abstract: The provision of public goods regularly embodies interrelated spheres of influence on multiple scales. This article examines the nature of human behavior in a multilevel social dilemma game with positive provision externalities to local and global scales. We report experimental results showing that behavior in multilevel games is strongly driven by asymmetric conditional cooperation prioritizing local level externalities. Our findings demonstrate how individuals over time adjust their behavior to local conditions. We do not find significant adjustment to global group average, suggesting that the local group creates a salient reference group for social comparisons in multilevel public goods provision. Our results emphasize the importance of strong local level commitment when designing institutions to promote sustainable provision of globally important public goods like the global climate.

Keywords: public good; spillover game; groups; experiment; transboundary effects (search for similar items in EconPapers)
Date: 2012
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DOI: 10.1515/1935-1682.3207

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