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Increasing pool funds in public goods: The effects of deposit-based delayed rewards

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  • Zhang, Xiaoyang
  • Chen, Tong
  • Chen, Qiao
  • Li, Xueya

Abstract

The inspiration for this paper comes from the deposit-based delayed rewards that Mobike company used in its initial promotion. This paper goes to investigate the viability of this method on increasing pool funds in the supply of public goods. We take into account different deposit, reward value and delay time of reward, and take the fraction of cooperators, the sum of contributions and the net profit of organizers as indicators of cooperation success. Our results show that the lower deposit, higher reward or shorter delay time encourages fast cooperation. Furthermore, proper matching of these three factors helps the organizers earn higher profits. Through this approach, organizers have more funds for rewarding from deposits and the delayed-rewards. And the delay of rewards based on the players’ contribution rankings can improve the donations of players. For players, the cost of getting the reward is small because the deposit can be refundable. To sum up, the deposit-based delayed rewards mechanism complements various ways to promote cooperation.

Suggested Citation

  • Zhang, Xiaoyang & Chen, Tong & Chen, Qiao & Li, Xueya, 2020. "Increasing pool funds in public goods: The effects of deposit-based delayed rewards," Chaos, Solitons & Fractals, Elsevier, vol. 140(C).
    • Handle: RePEc:eee:chsofr:v:140:y:2020:i:c:s096007792030597x
    DOI: 10.1016/j.chaos.2020.110201
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