EconPapers    
Economics at your fingertips  
 

Favor Trading in Public Good Provision

Ragan Petrie and Sarah Jacobson
Additional contact information
Ragan Petrie: Interdisciplinary Center for Economic Science (ICES), George Mason University, 4400 University Drive, MSN 1B2

No 2013-03, Department of Economics Working Papers from Department of Economics, Williams College

Abstract: Favor trading is common. We do something nice for someone and they do something nice in return. Several motives might underlie such behavior, including altruism, strategic motives, and direct or indirect positive reciprocity. It is not yet well-understood how these fit together to affect behavior, how they interact in various institutional structures, and how they play out over time. We use a laboratory experiment to study the elements and dynamics of favor trading in a particular setting: the private provision of a public good. In our experiment, giving subjects the ability to practice targeted reciprocity by making a simple, low-cost change in information provision increases contributions to the public good by 14%. Subjects reward group members who have previously been generous to them and withhold rewards from ungenerous group members. Strategic concerns cannot explain all of this behavior, and it must be at least partly due to direct reciprocity. When someone cannot directly benefit from favor trading, he gives much less to the public good. People thus excluded from the "circle of reciprocity" provide a clean and strict test of indirect reciprocity. Contrary to previous studies in the literature, we do not observe indirect reciprocity.

Keywords: public goods; direct and indirect reciprocity; experiment; peer-to-peer fundraising (search for similar items in EconPapers)
JEL-codes: C92 D01 H41 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2013-09
New Economics Papers: this item is included in nep-cbe, nep-cdm, nep-exp and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://web.williams.edu/Economics/wp/Favor_Tradin ... e_sept2013_final.pdf Full text (application/pdf)

Related works:
Journal Article: Favor trading in public good provision (2014) Downloads
Working Paper: Favor Trading in Public Good Provision (2013) Downloads
Working Paper: Favor Trading in Public Good Provision (2012) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wil:wileco:2013-03

Ordering information: This working paper can be ordered from
gp4@williams.edu
The price is Free.

Access Statistics for this paper

More papers in Department of Economics Working Papers from Department of Economics, Williams College Williamstown, MA 01267. Contact information at EDIRC.
Bibliographic data for series maintained by Greg Phelan (gp4@williams.edu).

 
Page updated 2025-03-30
Handle: RePEc:wil:wileco:2013-03