Complementarity in the Private Provision of Public Goods by Homo Pecuniarius and Homo Behavioralis

Guidon Fenig, Giovanni Gallipoli () and Yoram Halevy

Microeconomics.ca working papers from Vancouver School of Economics

Abstract: We examine coordination in private provision of public goods when agents' contributions are complementary. When complementarity is sufficiently high an additional full-contribution equilibrium emerges. We experimentally investigate subjects’ behavior using a between-subject design that varies complementarity. When two equilibria exist, subjects coordinate on the full-contribution equilibrium. When complementarity is sizable but only a zero-contribution equilibrium exists, subjects persistently contribute above it. Observed choices and and other nonchoice data indicate heterogeneity among subjects and two distinct types. Homo pecuniarius maximizes profits by best-responding to beliefs, while Homo behavioralis identifies this strategy but chooses to deviate from it – sacrificing pecuniary rewards to support altruism or competitiveness.

Keywords: Public goods; Voluntary Contribution Mechanism; Complementarity; Coordination; Altruism; Competitiveness; Warm-Glow; Joy of Winning; Laboratory Experi (search for similar items in EconPapers)
JEL-codes: C72 C92 D03 D83 H41 (search for similar items in EconPapers)
Pages: 60 pages
Date: 2015-11-15, Revised 2016-05-02
New Economics Papers: this item is included in nep-gth
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Persistent link: https://EconPapers.repec.org/RePEc:ubc:pmicro:yoram_halevy-2015-21

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