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Beyond perfect substitutability in public good games: heterogeneous structures of preferences

Marion Dupoux

No 2017.21, Working Papers from FAERE - French Association of Environmental and Resource Economists

Abstract: The literature on public good games is very focused on the additive separability of the values of the private and the public goods. Yet, the additive structure underlies a perfect substitutability relationship between private and public goods, which is a strong assumption. This paper studies the effect of payoff/preference structures on contributions to the public good within a voluntary contributions experiment in both homogeneous and heterogeneous groups. Within the structure of substitutability, I find that subjects free-ride more often when they interact with subjects of the other type (complementarity) for whom it is optimal to contribute. Introducing such a heterogeneity may provide a method for the identification of free-riders. Nonetheless, an advantageous inequality aversion emerges as well. This means that under perfect substitutability, subjects tend to dislike earning too much compared to their group member whose payoffs underlie complementarity, a more constraining structure.

Keywords: public good game; substitutability/complementarity; structure of payoffs; free-riding; inequality (search for similar items in EconPapers)
JEL-codes: C71 C90 C92 D70 H41 (search for similar items in EconPapers)
Pages: 55 pages
Date: 2017-10
New Economics Papers: this item is included in nep-cdm, nep-exp and nep-gth
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Persistent link: https://EconPapers.repec.org/RePEc:fae:wpaper:2017.21

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