Designing Feedback in Voluntary Contribution Games - The Role of Transparency

Bernd Irlenbusch, Rainer Rilke and Gari Walkowitz

No 18-01, WHU Working Paper Series - Economics Group from WHU - Otto Beisheim School of Management

Abstract: We analyze the effects of limited feedback on beliefs and contributions in a repeated public goods game setting. In a first experiment, we test whether exogenously determined feedback about a good example (i.e., the maximum contribution in a period) in contrast to a bad example (i.e., the minimum contribution in a period) induces higher contributions. We find that when the type of feedback is not transparent to the group members, good examples boost cooperation while bad examples hamper it. There is no difference when the type of feedback is transparent. In a second experiment, feedback is endogenously chosen by a group leader. The results show that a large majority of the group leaders count on the positive effect of providing a good example. This is true regardless whether they choose the feedback type to be transparent or non-transparent. Half of the group leaders make the type of feedback transparent. With endogenously chosen feedback about good examples no difference in contributions can be observed among transparent and non-transparent feedback selection. In both experiments feedback shapes subjects’ beliefs. With exogenously chosen feedback, transparent feedback tends to reduce beliefs when good examples are provided as feedback and tends to increase beliefs in when bad examples are provided as feedback compared to the respective non-transparent cases. Our results shed new light on the design of feedback provision in public goods settings.

Keywords: Feedback Design; Transparency; Public Goods; Imperfect Conditional Cooperation; Experiment (search for similar items in EconPapers)
JEL-codes: C92 D82 H41 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2018-04-04
New Economics Papers: this item is included in nep-cbe, nep-cdm, nep-exp and nep-gth
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Journal Article: Designing feedback in voluntary contribution games: the role of transparency (2019)
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