On the performance of rule-based contribution schemes under endowment heterogeneity

Martin Kesternich, Andreas Lange and Bodo Sturm ()
Additional contact information
Bodo Sturm: Centre for European Economic Research (ZEW)

Experimental Economics, 2018, vol. 21, issue 1, No 8, 180-204

Abstract: Abstract We experimentally test different rule-based contribution mechanisms in a repeated 4-player public goods game with endowment heterogeneity and compare them to a VCM, distinguishing between a random and an effort-based allocation of endowments. We find that endowment heterogeneities limit the efficiency gains from these rule-based contribution schemes under random allocation. Under effort-based allocations, substantial efficiency gains relative to a VCM occur. These are largely driven by significant reductions of contributions in VCM, while the rule-based mechanisms generate stable efficiency levels, even though falling short in realizing the maximal efficiency gains. Our results indicate that the procedure of endowment allocation impacts the perception of what constitutes a fair burden sharing.

Keywords: Public goods; Institutions; Rule-based contribution schemes; Minimum contribution rules; Burden sharing; Cooperation; Endowment heterogeneity (search for similar items in EconPapers)
JEL-codes: C72 C92 H41 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

Downloads: (external link)
http://link.springer.com/10.1007/s10683-017-9535-2 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
Working Paper: On the performance of rule-based contribution schemes under endowment heterogeneity (2014)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:expeco:v:21:y:2018:i:1:d:10.1007_s10683-017-9535-2

Ordering information: This journal article can be ordered from
http://www.springer. ... ry/journal/10683/PS2

DOI: 10.1007/s10683-017-9535-2

Access Statistics for this article

Experimental Economics is currently edited by David J. Cooper, Lata Gangadharan and Charles N. Noussair

More articles in Experimental Economics from Springer, Economic Science Association Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().