The consequences of a refund in threshold public good games

Edward Cartwright and Anna Stepanova
Authors registered in the RePEc Author Service: Anna Cartwright

Economics Letters, 2015, vol. 134, issue C, 29-33

Abstract: We revisit the question of whether a refund increases efficiency in threshold public good games. New experimental evidence is presented on the effect of endowment size. We demonstrate that a refund increases efficiency if and only if the endowment is small relative to the threshold. We also propose a novel way to analyze the effect of a refund. Specifically, we argue that a refund increases efficiency only if significantly many groups converge towards zero contributions in the absence of a refund.

Keywords: Public good; Threshold; Refund; Money back guarantee (search for similar items in EconPapers)
JEL-codes: C72 C92 H41 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:134:y:2015:i:c:p:29-33

DOI: 10.1016/j.econlet.2015.05.032

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