The Provision of Public Goods with Positive Group Interdependencies

Werner Güth () and Lauri Sääksvuori

No 2010-022, Jena Economics Research Papers from Friedrich-Schiller-University Jena

Abstract: This article examines the nature of human behavior in a nested social dilemma referred to as the Spillover Game. Players are divided into two groups with positive production interdependencies. Based on theoretically derived opportunistic, local, and global optima, our experimental results demonstrate the importance of in-group beneficiaries over global efficiency. We find that the observed behavior is primarily determined by an imperfect conditional cooperation that prioritizes local level feedback. Results stress the importance of building strong local level commitment to encourage the provision of public goods with positive externalities.

Keywords: Public good; experiment; groups; Spillover Game; social dilemma (search for similar items in EconPapers)
JEL-codes: C72 C91 C92 H41 (search for similar items in EconPapers)
Date: 2010-03-25
New Economics Papers: this item is included in nep-cbe, nep-exp, nep-pbe and nep-pub
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Persistent link: https://EconPapers.repec.org/RePEc:jrp:jrpwrp:2010-022

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