The emergence of coordination in public good games

Abstract

Abstract:In physical models it is well understood that the aggregate behaviour of a system is not in one to one correspondence with the behaviour of the average individual element of that system. Yet, in many economic models the behaviour of aggregates is thought of as corresponding to that of an individual. A typical example is that of public goods experiments. A systematic feature of such experiments is that, with repetition, people contribute less to public goods. A typical explanation is that people "learn to play Nash" or something approaching it. To justify such an explanation, an individual learning model is tested on average or aggregate data. In this paper we will examine this idea by analysing average and individual behaviour in a series of public goods experiments. We analyse data from a series of games of contributions to public goods and firstly to see what happens, if we follow the standard approach and test a learning model on the average data. We then look at individual data, examine the changes that this produces and see if some general model such as the EWA (Expected Weighted Attraction) with varying parameters can account for individual behaviour. We find that once we disaggregate data such models have poor explanatory power. Groups do not learn as supposed, their behaviour differs markedly from one group to another, and the behaviour of the individuals who make up the groups also varies within groups. The decline in aggregate contributions cannot be explained by resorting to a uniform model of individual behaviour.

Selfish or selfless? The role of empathy in economics

“…It remains to be seen, of course, to what extent moral self-worth is connected with people's self-assessed empathetic character traits. If it is, which might seem plausible Hichri & Kirman (2007). Open circles, subject 1; filled circles, subject 2; thick line, subject 3 and thin line, subject 4.…”

“…In what follows, we will use the evidence from a series of public goods experiments run by Hichri & Kirman (2007). The basic idea of public goods experiments is that each individual is in a group and has an initial allotment of money.…”

“…Nevertheless, experimental studies show that, at least in the early stages of such games, there is a large fraction of people who over-contribute in a public goods game with respect to the Nash equilibrium. Hichri & Kirman (2007) were particularly interested in finding a situation in which, even at the Nash equilibrium, total contributions can be positive. For this, they conceived a theoretical model with a concave payoff from the contributions to the public good instead of a linear payoff.…”

A within-subject analysis of other-regarding preferences

“…However, Andersen et al (2008) report stable risk preferences when subjects had to repeat the same risk-aversion task at two points in time. Hichri and Kirman (2007) analyze the explanatory power of a learning model (EWA) in a public-good game and find that the model has poor explanatory power at the individual level. Garrod (2009) compares an ultimatum game, a dictator game, an impunity game and a guarantor game within subjects.…”

The We and the I: The Logic of Voluntary Associations

“…The introduction of this parameter allows to vary the attractiveness of the good. In fact, as has been noted in some experimental studies, the attractiveness of a public good can positively influence individual voluntary contributions to it (Hichri and Kirman, 2007).…”