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Public goods, property rights, and investment incentives: An experimental investigation

David Kusterer and Patrick Schmitz

Journal of Economic Behavior & Organization, 2020, vol. 177, issue C, 514-532

Abstract: How should ownership rights be allocated in public-good settings? We report data from a laboratory experiment with 480 participants that was designed to test a public-good version of the property rights theory based on incomplete contracting. Consider two parties, one of whom can invest in the provision of a public good. The parties value the public good differently. In the literature it has been argued that more investments will be made if the high-valuation party is the owner, regardless of whether or not this party is the investor. Our experimental results cast some doubts on the robustness of this conclusion.

Keywords: Property rights; Public goods; Incomplete contracts; Investment incentives; Laboratory experiments (search for similar items in EconPapers)
JEL-codes: D23 D86 H41 L33 C92 (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:177:y:2020:i:c:p:514-532

DOI: 10.1016/j.jebo.2020.06.009

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Journal of Economic Behavior & Organization is currently edited by Houser, D. and Puzzello, D.

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