Public Good and Private Good Valuation for Waiting, Time Reduction: A Laboratory Study

Tibor Neugebauer and Stefan Traub ()

LSF Research Working Paper Series from Luxembourg School of Finance, University of Luxembourg

Abstract: In a laboratory experiment subjects were endowed with money and waiting time. Preferences for waiting time reduction were elicited with salient rewards both as a private good and as a public good. The allocations of the public good that were theoretically predicted by the Nash equilibrium and the Lindahl equilibrium, respectively, were computed from the individual private good valuations and compared with the subjects’ actual contributions. We found a significant positive correlation between private good valuations in terms of willingness-to-pay and public good valuations in terms of voluntary contributions. Group contributions to public waiting time reduction significantly exceeded the non-cooperative prediction and were close to the socially optimal level. However, for a majority of subjects, the Lindahl equilibrium was not able to predict the observed contributions.

Keywords: Cartel Stability; Delegation; Relative Performance Evaluation (search for similar items in EconPapers)
JEL-codes: C90 D61 H41 (search for similar items in EconPapers)
Date: 2011
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-mic
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Journal Article: Public good and private good valuation for waiting time reduction: a laboratory study (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:crf:wpaper:11-03

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