Competition among public good providers for donor rewards

Natalie Struwe, Esther Blanco and James Walker
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Esther Blanco: University of Innsbruck

Experimental Economics, 2024, vol. 27, issue 1, No 10, 215-243

Abstract: Abstract We present experimental evidence for decision settings where public good providers compete for endogenous rewards which are donations (transfers) offered by outside donors. Donors receive benefits from public good provision but cannot provide the good themselves. The performance of three competition mechanisms is examined in relation to the level of public good provision and transfers offered by donors. In addition to a contest where transfers received by public good providers are proportional to effort, we study two contests with exclusion from transfers, namely a winner-takes-all and a loser-gets-nothing. We compare behavior in these three decision settings to the default setting of no-contest (no-transfers). Results for this novel decision environment with endogenous transfers show that donors offer transfers (contest prizes) at similar levels across contests and contributions to the public good are not significantly different in the three contests settings, but are consistently and significantly higher in all contests compared to the setting with no-transfers. Initially, the winner-takes-all setting leads to a significantly higher increase in public good contributions compared to the other two contests; but this difference diminishes across decision rounds.

Keywords: Public good; Institution; Externality; Contests; Laboratory experiment (search for similar items in EconPapers)
JEL-codes: C92 D70 H41 (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (1)

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Working Paper: Competition Among Public Good Providers for Donor Rewards (2021)
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DOI: 10.1007/s10683-022-09766-7

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