Is there a hidden cost of imposing a minimum contribution level for public good contributions?

Martin Kocher, Peter Martinsson, Emil Persson and Xianghong Wang
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Xianghong Wang: School of Economics, Renmin University of China, Postal: Department of Economics., School of Business, Economics and Law, Göteborg University, Box 640, SE 40530 GÖTEBORG

No 654, Working Papers in Economics from University of Gothenburg, Department of Economics

Abstract: We examine the effects of either exogenously imposing or endogenously letting subjects choose whether to impose minimum contribution levels (MCLs) in a linear public goods experiment using the strategy method. Our results on contribution levels to the public goods are fairly independent of how MCLs are imposed. We find that the main effect of an MCL on unconditional contributions is that it increases low contribution levels to the MCL imposed, while the effect of those contributing more than the MCL before its introduction depends on the size of the MCL. Unexpectedly, there is much more crowding out for a low MCL than for a relatively high MCL. However, the distribution of contribution types is stable across different MCLs.

Keywords: Cooperation; China; experiment; minimum level; public good (search for similar items in EconPapers)
JEL-codes: C91 D03 D64 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2016-04-05
New Economics Papers: this item is included in nep-cbe and nep-exp
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

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Related works:
Journal Article: Is there a hidden cost of imposing a minimum contribution level for public good contributions? (2016)
Working Paper: Is there a hidden cost of imposing a minimum contribution level for public good contributions? (2016)
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