Heterogeneity and the voluntary provision of public goods

Abstract

We investigate the effects of heterogeneity, incomplete information and communication on aggregate contributions to a public good using the voluntary contribution mechanism in a nonlinear laboratory environment. One-dimensional heterogeneity (heterogeneity in income or preferences) and two-dimensional heterogeneity (heterogeneity in income and preferences) both increase voluntary contributions. The effect is greatest when information is incomplete in the sense that subjects do not know each other's payoffs. Incomplete information also reduces contributions in the homogeneous case. Communication reverses the relative importance of oneand two-dimensional heterogeneity in promoting cooperation.

Experiments in Environmental Economics and Some Close Relatives

“…The experimental evidence on this topic is mixed. Marwell and Ames (1979) find no difference to the homogenous case, Bagnoli and McKee (1991) and Rapoport and Suleiman (1993) find a slightly negative influence, and Brookshire et al (1993) as well as Chan et al (1999) find that heterogeneity interacts with other parts of the experimental design. For example, with communication, heterogeneity leads to a decrease in contribution while without communication the opposite is the case.…”

“…Therefore, it is a natural extension of the standard design to introduce communication, preferably in a controlled manner. For public good games, this has been done, for example by Orbell et al (1988), Kramer and Brewer (1986), Isaac and Walker (1988), and Chan et al (1999). The common finding of all of these studies is that although it is 'cheap', communication matters a lot in that it increases the amount of cooperation significantly.…”

“…3. In some experiments, for example Andreoni (1993) and Chan et al (1999), a non-linear production function is used to get an interior solution for the Nash equilibrium. See Laury and Holt (forthcoming) for a survey.…”

Parallelism in the Lab and the Field: Testing Robustness of the Minimum‐Contributing‐Set Mechanism

“…In our experiments, the information treatment focuses on the level of information provided to the subjects at the time they choose to contribute or not. Chan et al (1999) also study the effect of such information treatments, albeit in a different public-good setting. They find an interaction between information and heterogeneity within the group.…”

Income Heterogeneity in the Voluntary Provision of Dynamic Public Goods

“…There is a growing literature on the effects of income heterogeneity on the voluntary cooperation, which varies notably in both the features/structure (linear or nonlinear environments) of the design and results (see e.g. Rapoport and Suleiman, 1993;Chan et al, 1999;Buckley and Croson, 2006;Kroll et al, 2007;Anderson et al, 2008). 1 However, there has been, to the best of our knowledge, no attempt to examine the impact of income inequality under a dynamic public good game setting.…”