Asset Markets and Equilibrium Selection in Public Goods Games with Provision Points: An Experimental Study

Bruno Broseta, Enrique Fatas () and Tibor Neugebauer

Economic Inquiry, 2003, vol. 41, issue 4, 574-591

Abstract: We report experimental results on the effects that auctioning the right to play a public goods game with a provision point may have on equilibrium selection and individual behavior. Auctioning off such a right among a larger population of players strikingly enhances public good provision. Once public good provision is obtained, the auction price at the preliminary stage increases to its upper limit, dissipating all players' gains associated with the provision of the public good. Individual deviations from the equilibrium strategy are neither able to force lower market prices nor to affect provision of the public good in subsequent periods. (JEL C72, C92, H41) Copyright 2003, Oxford University Press.

JEL-codes: C72 C92 H41 (search for similar items in EconPapers)
Date: 2003
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Citations: View citations in EconPapers (16)

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Working Paper: ASSET MARKETS AND EQUILIBRIUM SELECTION IN PUBLIC GOODS GAMES WITH PROVISION POINTS: AN EXPERIMENTAL STUDY (2001)
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