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Intragroup competition in public good games: The role of relative performance incentives and risk attitudes

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  • Annarita Colasante
  • Aurora García‐Gallego
  • Nikolaos Georgantzis
  • Andrea Morone
  • Tiziana Temerario

Abstract

We analyze a public good game (PGG) with intragroup competition in which, generally but not always, the dominant strategy is to not contribute; therefore, free riding is the unique Nash equilibrium, not achieving Pareto efficiency. We propose a PGG setup where subjects' contributions are rewarded with different individual returns following a rank‐order voluntary contribution mechanism. It is found that the resulting competition for a better return significantly increases contributions. This effect is sensitive to the salience of return differences rewarding higher contributions. Furthermore, the positive effect of return differences on contribution levels depends on an individual's return‐to‐risk sensitivity as elicited through an independent risk elicitation task.

Suggested Citation

  • Annarita Colasante & Aurora García‐Gallego & Nikolaos Georgantzis & Andrea Morone & Tiziana Temerario, 2019. "Intragroup competition in public good games: The role of relative performance incentives and risk attitudes," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 21(5), pages 847-865, October.
    • Handle: RePEc:bla:jpbect:v:21:y:2019:i:5:p:847-865
    DOI: 10.1111/jpet.12369
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    Cited by:

    1. Shakun D. Mago & Jennifer Pate, 2023. "Greed and fear: Competitive and charitable priming in a threshold volunteer's dilemma," Economic Inquiry, Western Economic Association International, vol. 61(1), pages 138-161, January.
    2. Natalie Struwe & Esther Blanco & James M. Walker, 2024. "Competition among public good providers for donor rewards," Experimental Economics, Springer;Economic Science Association, vol. 27(1), pages 215-243, March.
    3. Hubert János Kiss & Alfonso Rosa-Garcia & Vita Zhukova, 2023. "Group contest in a coopetitive setup: experimental evidence," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 18(3), pages 463-490, July.
    4. Angela Stefania Bergantino & Sara Gil‐Gallen & Andrea Morone, 2023. "Do risk and competition trigger conditional cooperation? Evidence from public good experiments," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 94(1), pages 39-73, March.
    5. Yansong Li & Zhenliang Liu & Yuqian Wang & Edmund Derrington & Frederic Moisan & Jean-Claude Dreher, 2023. "Spillover effects of competition outcome on future risky cooperation," Post-Print hal-04325682, HAL.

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