Heterogeneity and Cooperation in Privileged Groups: The Role of Capability and Valuation on Public Goods Provision

Felix Kölle

No 2012-07, Discussion Papers from The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham

Abstract: We experimentally investigate cooperation in privileged groups which according to Olson (1965) are groups in which at least one member has an incentive to supply a positive amount of the public good. More specifically, we analyze group member heterogeneity with respect to two dimensions: capability and valuation. Our results reveal that with and without punishment opportunities, heterogeneity crucially affects cooperation and coordination within groups. Compared to non-privileged groups, asymmetric valuations for the public good have negative effects, and asymmetric capabilities in providing the public good have positive effects on voluntary contributions. The main reason for these results are the different externalities contributions have on the other group members’ payoffs affecting individuals’ willingness to cooperate. Hence, whether heterogeneity facilitates or impedes collective action, and whether privileged groups are as privileged as they initially seem is subject to the nature of their asymmetry.

Keywords: public goods; heterogeneity; privileged groups; inequality; cooperation; punishment (search for similar items in EconPapers)
Date: 2012-07
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-pbe
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Citations: View citations in EconPapers (1)

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Working Paper: Heterogeneity and Cooperation in Privileged Groups: The Role of Capability and Valuation on Public Goods Provision (2012)
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