How to increase and sustain cooperation in public goods games: Conditional commitments via a mediator

Mehmet Y. Gürdal, Özgür Gürerk, Yeliz Kaçamak and Edip Kart

Journal of Economic Behavior & Organization, 2024, vol. 228, issue C

Abstract: Conditional commitment devices, such as price-matching guarantees, legal agreements, and smart contracts, can significantly enhance cooperation and improve outcomes in various scenarios. Despite their potential, empirical evidence of their effectiveness in the context of public goods is limited. This paper addresses this gap by demonstrating that conditional and binding commitments can indeed increase voluntary contributions to public goods. We begin by theoretically analyzing the impact of conditional commitments managed by a mediator on public good contributions. Our analysis shows that conditional commitments can be structured to achieve a Pareto Optimal Nash Equilibrium (PONE). We then validate our theoretical findings with laboratory experiments. The results reveal that when a PONE exists, nearly all participant groups adopt conditional commitments and achieve high levels of sustained cooperation. Conversely, when conditional commitments lead to socially inefficient outcomes, their use declines and cooperation levels drop significantly.

Keywords: Prisoner’s dilemma; Cooperation; Public goods; Assortative matching; Mediator; Commitment (search for similar items in EconPapers)
JEL-codes: C72 C91 H41 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:228:y:2024:i:c:s0167268124004037

DOI: 10.1016/j.jebo.2024.106789

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