Predicting voluntary contributions by “revealed‐preference Nash‐equilibrium”

Irenaeus Wolff

Economic Inquiry, 2025, vol. 63, issue 3, 846-864

Abstract: One‐shot public‐good situations are prominent in the public debate, and a prime example for behavior diverging from the standard Nash‐equilibrium. Could a Nash‐equilibrium predict one‐shot public‐good behavior in principle? A “revealed‐preference Nash‐equilibrium” (rpne) out‐of‐sample predicts behavior, outperforming other social‐preference models. The rpne is the set of “mutual conditional contributions,” interpreting elicited conditional contributions as best‐responses. Individual‐level analyses confirm the results and allow for studying equilibrium selection. While the Pareto‐dominant equilibrium is the modal choice, many participants use other criteria. Given the predictive positive‐contributions rpnes, many real‐life public‐good problems may be solvable if players could coordinate on an equilibrium‐selection criterion beforehand.

Date: 2025
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https://doi.org/10.1111/ecin.13280

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Working Paper: Predicting Voluntary Contributions by `Revealed-Preference Nash-Equilibrium' (2022)
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