A veil of ignorance: uncertain and ambiguous individual productivity supports stable contributions to a public good

Zack Dorner, Steven Tucker and Gazi Hassan ()

Working Papers in Economics from University of Waikato

Abstract: The linear public goods game with a voluntary contribution mechanism (VCM) has a large literature providing many insights for the field. Recent papers have investigated impacts on contributions of heterogeneity, risk and ambiguity in marginal per capita return (MPCR) from the public good. We investigate a neglected, but highly relevant set up. In our experiment, the voluntary contribution of one individual to the public good may be more/less productive than another, and this productivity may be uncertain or ambiguous. We have four treatments: HOMOGENOUS (all members of the fixed groups of four are of equal productivity), CERTAIN (two high productivity, two low, but randomly switching in future periods), UNCERTAIN (each subject has a 50-50 lottery of being high or low productivity) and AMBIGUOUS (each subject has an unknown probability of being high or low). High productivity subjects contribute more in the CERTAIN treatment. We find contribution levels are stable in the three treatments over the 10 periods, whereas contributions in the HOMOGENOUS control decline as per the standard finding in a public goods game. These results suggest a natural veil of ignorance about current or future individual productivity, and a social norm of the highly productive contributing more, support a more stable level of contributions over time. Our results are relevant to many field examples, such as contributing to the public good by wearing a face mask in a pandemic, given it is uncertain/ambiguous whether the wearer is contagious (high productivity) or not (low productivity).

Keywords: ambiguity; heterogeneous productivity; public goods game; social norms; uncertainty; voluntary contribution mechanism (search for similar items in EconPapers)
JEL-codes: C92 D62 D63 D64 H41 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2021-03-08
New Economics Papers: this item is included in nep-exp, nep-gth and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:wai:econwp:21/01

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