Voluntary Contributions by Consent or Dissent
Jonathan Tan (),
Yves Breitmoser () and
MPRA Paper from University Library of Munich, Germany
We study games where voluntary contributions can be adjusted until a steady state is found. In consent games contributions start at zero and can be increased by consent, and in dissent games contributions start high and can be decreased by dissent. Equilibrium analysis predicts free riding in consent games but, in contrast, as much as socially efficient outcomes in dissent games. In our experiment, inexperienced subjects contribute high in consent games and low in dissent games, but behavior converges toward equilibrium predictions over time and eventually experienced subjects contribute as predicted: low in consent games and high in dissent games. Observed deviations from equilibrium in consent games are best explained by level-k reasoning, and those in dissent games are best explained by hierarchical reasoning formalized as nested logit equilibrium.
Keywords: public good; contribution game; bounded rationality; mechanism (search for similar items in EconPapers)
JEL-codes: C71 C44 H41 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cbe, nep-exp, nep-gth, nep-hpe and nep-pbe
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Journal Article: Voluntary contributions by consent or dissent (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:22001
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