IDEAS home Printed from https://ideas.repec.org/a/eee/jobhdp/v111y2010i1p1-12.html
   My bibliography  Save this article

Is it even worth it? The effect of loss prospects in the outcome distribution of a public goods dilemma

Author

Listed:
  • McCarter, Matthew W.
  • Rockmann, Kevin W.
  • Northcraft, Gregory B.

Abstract

Contributions to public goods are premised on the expectation that the collective will realize benefit in excess of the value of required contributions. However, past research has focused on public goods of fixed and known value, for which the added value of the produced public good is obvious. Research has largely ignored public goods whose eventual value is uncertain at the time contribution decisions are made. Two studies explored the effects of outcome variance on individuals' contributions to a public good and their reasons for contributing. Contributions were negatively affected by loss prospects in the distribution of possible outcomes. Further, loss prospects directly discouraged contributions because of loss aversion, and indirectly discouraged contributions by fueling fears that others would not contribute. The negative effects of loss prospects were stronger when social uncertainty was low. Implications for social dilemma research and the effective management of collective action are discussed.

Suggested Citation

  • McCarter, Matthew W. & Rockmann, Kevin W. & Northcraft, Gregory B., 2010. "Is it even worth it? The effect of loss prospects in the outcome distribution of a public goods dilemma," Organizational Behavior and Human Decision Processes, Elsevier, vol. 111(1), pages 1-12, January.
    • Handle: RePEc:eee:jobhdp:v:111:y:2010:i:1:p:1-12
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0749-5978(09)00047-8
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Chen, Xiao-ping & Komorita, S. S., 1994. "The Effects of Communication and Commitment in a Public Goods Social Dilemma," Organizational Behavior and Human Decision Processes, Elsevier, vol. 60(3), pages 367-386, December.
    2. Chen, Xiao-Ping & Au, Wing Tung & Komorita, S. S., 1996. "Sequential Choice in a Step-Level Public Goods Dilemma: The Effects of Criticality and Uncertainty," Organizational Behavior and Human Decision Processes, Elsevier, vol. 65(1), pages 37-47, January.
    3. Violina P. Rindova & Antoaneta P. Petkova, 2007. "When Is a New Thing a Good Thing? Technological Change, Product Form Design, and Perceptions of Value for Product Innovations," Organization Science, INFORMS, vol. 18(2), pages 217-232, April.
    4. Bottom, William P., 1998. "Negotiator Risk: Sources of Uncertainty and the Impact of Reference Points on Negotiated Agreements," Organizational Behavior and Human Decision Processes, Elsevier, vol. 76(2), pages 89-112, November.
    5. Axel Franzen, 1995. "Group Size and One-Shot Collective Action," Rationality and Society, , vol. 7(2), pages 183-200, April.
    6. Stanley E. Fawcett & Gregory M. Magnan & Matthew W. McCarter, 2008. "Supply chain alliances and social dilemmas: bridging the barriers that impede collaboration," International Journal of Procurement Management, Inderscience Enterprises Ltd, vol. 1(3), pages 318-341.
    7. Matthew Rabin & Richard H. Thaler, 2013. "Anomalies: Risk aversion," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 27, pages 467-480, World Scientific Publishing Co. Pte. Ltd..
    8. Cadsby, Charles Bram & Maynes, Elizabeth, 1999. "Voluntary provision of threshold public goods with continuous contributions: experimental evidence," Journal of Public Economics, Elsevier, vol. 71(1), pages 53-73, January.
    9. Krishnamurthy, Sandeep & Bottom, William P. & Rao, Ambar G., 2003. "Adaptive aspirations and contributions to a public good: Generic advertising as a response to decline," Organizational Behavior and Human Decision Processes, Elsevier, vol. 92(1-2), pages 22-33.
    10. Rapoport, Amnon & Eshed-Levy, Dalit, 1989. "Provision of step-level public goods: Effects of greed and fear of being gypped," Organizational Behavior and Human Decision Processes, Elsevier, vol. 44(3), pages 325-344, December.
    11. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    12. Cortazar, Rene, 1997. "Non-redundant Groups, the Assurance Game and the Origins of Collective Action," Public Choice, Springer, vol. 92(1-2), pages 41-53, July.
    13. T. K. Das & Bing‐Sheng Teng, 1996. "Risk Types And Inter‐Firm Alliance Structures," Journal of Management Studies, Wiley Blackwell, vol. 33(6), pages 827-843, November.
    14. Sniezek, Janet A. & May, Douglas R. & Sawyer, John E., 1990. "Social uncertainty and interdependence: A study of resource allocation decisions in groups," Organizational Behavior and Human Decision Processes, Elsevier, vol. 46(2), pages 155-180, August.
    15. Cheung, Steven N S, 1969. "Transaction Costs, Risk Aversion, and the Choice of Contractual Arrangements," Journal of Law and Economics, University of Chicago Press, vol. 12(1), pages 23-42, April.
    16. Robert Hoffmann & Lee Chew Ging & Bala Ramasamy, 2002. "Public policy and olympic success," Applied Economics Letters, Taylor & Francis Journals, vol. 9(8), pages 545-548.
    17. Chen, Xiao-Ping, 1996. "The Group-Based Binding Pledge as a Solution to Public Goods Problems," Organizational Behavior and Human Decision Processes, Elsevier, vol. 66(2), pages 192-202, May.
    18. Offerman, Theo & Sonnemans, Joep & Schram, Arthur, 1996. "Value Orientations, Expectations and Voluntary Contributions in Public Goods," Economic Journal, Royal Economic Society, vol. 106(437), pages 817-845, July.
    19. Sabater-Grande, Gerardo & Georgantzis, Nikolaos, 2002. "Accounting for risk aversion in repeated prisoners' dilemma games: an experimental test," Journal of Economic Behavior & Organization, Elsevier, vol. 48(1), pages 37-50, May.
    20. Cho, Jinsook & Lee, Jinkook, 2006. "An integrated model of risk and risk-reducing strategies," Journal of Business Research, Elsevier, vol. 59(1), pages 112-120, January.
    21. David E. Bell, 1995. "Risk, Return, and Utility," Management Science, INFORMS, vol. 41(1), pages 23-30, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Matthew W. McCarter & Shirli Kopelman & Thomas A. Turk & Candace E. Ybarra, 2012. "Too Many Cooks Spoil the Broth: How the tragedy of the anticommons emerges in organizations," Working Papers 12-14, Chapman University, Economic Science Institute.
    2. Matthew McCarter & Anya Samek & Roman Sheremeta, 2014. "Divided Loyalists or Conditional Cooperators? Creating Consensus About Cooperation in Multiple Simultaneous Social Dilemmas," Artefactual Field Experiments 00441, The Field Experiments Website.
    3. Gregory B. Northcraft & Ann E. Tenbrunsel, 2011. "Effective Matrices, Decision Frames, and Cooperation in Volunteer Dilemmas: A Theoretical Perspective on Academic Peer Review," Organization Science, INFORMS, vol. 22(5), pages 1277-1285, October.
    4. McCarter, Matthew & Sheremeta, Roman, 2013. "You Can’t Put Old Wine in New Bottles: The Effect of Newcomers on Coordination in Groups," MPRA Paper 43532, University Library of Munich, Germany.
    5. Matthew McCarter & Anya Samek & Roman Sheremeta, 2013. "Divided Loyalties or Conditional Cooperation? An Experimental Study of Contributions to Multiple Public Goods," Artefactual Field Experiments 00425, The Field Experiments Website.
    6. Angela C. M. Oliveira, 2021. "When risky decisions generate externalities," Journal of Risk and Uncertainty, Springer, vol. 63(1), pages 59-79, August.
    7. McCarter, Matthew W. & Budescu, David V. & Scheffran, Jürgen, 2011. "The give-or-take-some dilemma: An empirical investigation of a hybrid social dilemma," Organizational Behavior and Human Decision Processes, Elsevier, vol. 116(1), pages 83-95, September.
    8. Michael Caldara & Michael T. McBride & Matthew W. McCarter & Roman M. Sheremeta, 2017. "A Study of the Triggers of Conflict and Emotional Reactions," Games, MDPI, vol. 8(2), pages 1-12, April.
    9. McCarter, Matthew W. & Wade-Benzoni, Kimberly A. & Kamal, Darcy K. Fudge & Bang, H. Min & Hyde, Steven J. & Maredia, Reshma, 2020. "Models of intragroup conflict in management: A literature review," Journal of Economic Behavior & Organization, Elsevier, vol. 178(C), pages 925-946.
    10. Zhang, Xiaoyang & Chen, Tong & Chen, Qiao & Li, Xueya, 2020. "Will you cooperate in case the payoff can be guaranteed?," Chaos, Solitons & Fractals, Elsevier, vol. 130(C).
    11. Anna Lou Abatayo & Bo Jellesmark Thorsen, 2017. "One-shot exogenous interventions increase subsequent coordination in Denmark, Spain and Ghana," PLOS ONE, Public Library of Science, vol. 12(11), pages 1-19, November.
    12. Hota, Ashish R. & Garg, Siddharth & Sundaram, Shreyas, 2016. "Fragility of the commons under prospect-theoretic risk attitudes," Games and Economic Behavior, Elsevier, vol. 98(C), pages 135-164.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. McCarter, Matthew W. & Budescu, David V. & Scheffran, Jürgen, 2011. "The give-or-take-some dilemma: An empirical investigation of a hybrid social dilemma," Organizational Behavior and Human Decision Processes, Elsevier, vol. 116(1), pages 83-95, September.
    2. Roman M. Sheremeta & Matthew W. McCarter, 2013. "You Can’t Put Old Wine in New Bottles: The Effect of Newcomers on Coordination in Groups," Working Papers 13-02, Chapman University, Economic Science Institute.
    3. Gee, Laura K. & Schreck, Michael J., 2018. "Do beliefs about peers matter for donation matching? Experiments in the field and laboratory," Games and Economic Behavior, Elsevier, vol. 107(C), pages 282-297.
    4. Rose, Steven K. & Clark, Jeremy & Poe, Gregory L. & Rondeau, Daniel & Schulze, William D., 2002. "The private provision of public goods: tests of a provision point mechanism for funding green power programs," Resource and Energy Economics, Elsevier, vol. 24(1-2), pages 131-155, February.
    5. Federica Alberti & Edward J. Cartwright, 2016. "Full agreement and the provision of threshold public goods," Public Choice, Springer, vol. 166(1), pages 205-233, January.
    6. Bose, Bijetri & Rabotyagov, Sergey, 2018. "Provision of public goods using a combination of lottery and a provision point," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 73(C), pages 99-115.
    7. Robin Chark & Vincent Mak & A. V. Muthukrishnan, 2020. "The premium as informational cue in insurance decision making," Theory and Decision, Springer, vol. 88(3), pages 369-404, April.
    8. Patel, Amrish & Smith, Alec, 2019. "Guilt and participation," Journal of Economic Behavior & Organization, Elsevier, vol. 167(C), pages 279-295.
    9. Amrish Patel & Alec Smith, 2018. "Guilt and participation," University of East Anglia School of Economics Working Paper Series 2018-01, School of Economics, University of East Anglia, Norwich, UK..
    10. Bougherara, Douadia & Denant-Boemont, Laurent & Masclet, David, 2011. "Cooperation and framing effects in provision point mechanisms: Experimental evidence," Ecological Economics, Elsevier, vol. 70(6), pages 1200-1210, April.
    11. Malte Müller & Jens Rommel & Christian Kimmich, 2018. "Farmers’ Adoption of Irrigation Technologies: Experimental Evidence from a Coordination Game with Positive Network Externalities in India," German Economic Review, Verein für Socialpolitik, vol. 19(2), pages 119-139, May.
    12. John Garvey, 2010. "An investigation into risk propensity in bull and bear markets," Journal of Risk Research, Taylor & Francis Journals, vol. 13(6), pages 789-804, September.
    13. Jieyao Ding, 2012. "A Portfolio of Dilemmas: Experimental Evidence on Choice Bracketing in a Mini-Trust Game," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2012_06, Max Planck Institute for Research on Collective Goods.
    14. David M. McEvoy & James J. Murphy & John M. Spraggon & John K. Stranlund, 2011. "The problem of maintaining compliance within stable coalitions: experimental evidence," Oxford Economic Papers, Oxford University Press, vol. 63(3), pages 475-498, July.
    15. Andreas Löschel & Dirk Rübbelke, 2014. "On the Voluntary Provision of International Public Goods," Economica, London School of Economics and Political Science, vol. 81(322), pages 195-204, April.
    16. T. K. Das & Bing-Sheng Teng, 1998. "Time and Entrepreneurial Risk Behavior," Entrepreneurship Theory and Practice, , vol. 22(2), pages 69-88, January.
    17. Kent D. Messer & Todd M. Schmit & Harry M. Kaiser, 2005. "Optimal Institutional Mechanisms for Funding Generic Advertising: An Experimental Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(4), pages 1046-1060.
    18. Andersen, Steffen & Harrison, Glenn W. & Lau, Morten Igel & Rutström, Elisabet E., 2014. "Dual criteria decisions," Journal of Economic Psychology, Elsevier, vol. 41(C), pages 101-113.
      • Andersen, Steffen & Harrison, Glenn W. & Lau, Morten Igel & Rutström, Elisabet, 2009. "Dual Criteria Decisions," Working Papers 02-2009, Copenhagen Business School, Department of Economics.
    19. Firpo, Sergio & Galvao, Antonio F. & Kobus, Martyna & Parker, Thomas & Rosa-Dias, Pedro, 2020. "Loss Aversion and the Welfare Ranking of Policy Interventions," IZA Discussion Papers 13176, Institute of Labor Economics (IZA).
    20. repec:cup:judgdm:v:14:y:2019:i:3:p:234-279 is not listed on IDEAS
    21. Edward Cartwright & Anna Stepanova, 2017. "Efficiency in a forced contribution threshold public good game," International Journal of Game Theory, Springer;Game Theory Society, vol. 46(4), pages 1163-1191, November.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jobhdp:v:111:y:2010:i:1:p:1-12. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/obhdp .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.