Context effects in a negative externality experiment

Kent Messer (), Jordan Suter and Jubo Yan

No 10-09, Working Papers from University of Delaware, Department of Economics

Abstract: This study investigates the degree to which framing and context influence observed rates of free-riding behavior in a negative externality laboratory experiment. Building on the work of Andreoni (1995a) and Messer et al. (2007) we frame the decision not to contribute to a public fund as generating a negative externality on other group members. The experimental treatments involving 252 subjects vary communication, voting, and the status quo of the initial endowment. Results indicate that allowing groups the opportunity to communicate and vote significantly reduces rates of free-riding, and this effect is especially pronounced when initial endowments are placed in the private as opposed to the public fund.

Keywords: Negative externality; voluntary contribution mechanism; cheap talk; voting; status quo bias; experimental economics (search for similar items in EconPapers)
JEL-codes: C91 C92 H4 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2010
New Economics Papers: this item is included in nep-cbe and nep-exp
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