IDEAS home Printed from https://ideas.repec.org/a/kap/pubcho/v201y2024i1d10.1007_s11127-024-01165-1.html
   My bibliography  Save this article

Enhancing voluntary contributions in a public goods economy via a minimum individual contribution level

Author

Listed:
  • Michela Chessa

    (Université Côte d’Azur)

  • Patrick Loiseau

    (Inria, FairPlay Team
    Max-Planck Institute for Software Systems (MPI-SWS))

Abstract

We propose and theoretically analyze a measure to encourage greater voluntary contributions to public goods. Our measure is a simple intervention that restricts individuals’ strategy sets by imposing a minimum individual contribution level while still allowing for full free riding for those who do not want to contribute. We show that for a well-chosen value of the minimum individual contribution level, this measure does not incentivize any additional free riding while strictly increasing the total contributions relative to the situation without the minimum contribution level. Our measure is appealing because it is nonintrusive and in line with the principle of “freedom of choice.” It is easily implementable for many different public goods settings where more intrusive measures are less accepted. This approach has been implemented in practice in some applications, such as charities.

Suggested Citation

  • Michela Chessa & Patrick Loiseau, 2024. "Enhancing voluntary contributions in a public goods economy via a minimum individual contribution level," Public Choice, Springer, vol. 201(1), pages 237-261, October.
    • Handle: RePEc:kap:pubcho:v:201:y:2024:i:1:d:10.1007_s11127-024-01165-1
    DOI: 10.1007/s11127-024-01165-1
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11127-024-01165-1
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s11127-024-01165-1?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

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

    Other versions of this item:

    References listed on IDEAS

    as
    1. Groves, Theodore & Ledyard, John O, 1977. "Optimal Allocation of Public Goods: A Solution to the "Free Rider" Problem," Econometrica, Econometric Society, vol. 45(4), pages 783-809, May.
    2. Leonardo Bursztyn & Robert Jensen, 2017. "Social Image and Economic Behavior in the Field: Identifying, Understanding, and Shaping Social Pressure," Annual Review of Economics, Annual Reviews, vol. 9(1), pages 131-153, September.
    3. Bohm, Peter, 1972. "Estimating demand for public goods: An experiment," European Economic Review, Elsevier, vol. 3(2), pages 111-130.
    4. Oyama, Daisuke & Tercieux, Olivier, 2009. "Iterated potential and robustness of equilibria," Journal of Economic Theory, Elsevier, vol. 144(4), pages 1726-1769, July.
    5. Charles A. Holt & Susan K. Laury, 1997. "Classroom Games: Voluntary Provision of a Public Good," Journal of Economic Perspectives, American Economic Association, vol. 11(4), pages 209-215, Fall.
    6. Palfrey, Thomas R. & Rosenthal, Howard, 1984. "Participation and the provision of discrete public goods: a strategic analysis," Journal of Public Economics, Elsevier, vol. 24(2), pages 171-193, July.
    7. Andreoni, James & Bergstrom, Ted, 1996. "Do Government Subsidies Increase the Private Supply of Public Goods?," Public Choice, Springer, vol. 88(3-4), pages 295-308, September.
    8. Jennifer Zelmer, 2003. "Linear Public Goods Experiments: A Meta-Analysis," Experimental Economics, Springer;Economic Science Association, vol. 6(3), pages 299-310, November.
    9. Van Huyck, John B & Battalio, Raymond C & Beil, Richard O, 1990. "Tacit Coordination Games, Strategic Uncertainty, and Coordination Failure," American Economic Review, American Economic Association, vol. 80(1), pages 234-248, March.
    10. Jean Tirole & Roland Bénabou, 2006. "Incentives and Prosocial Behavior," American Economic Review, American Economic Association, vol. 96(5), pages 1652-1678, December.
    11. Schniter, Eric & Sheremeta, Roman & Shields, Timothy, 2015. "The Problem with All-or-nothing Trust Games: What Others Choose Not to Do Matters In Trust-based Exchange," MPRA Paper 68561, University Library of Munich, Germany.
    12. Guido, Andrea & Robbett, Andrea & Romaniuc, Rustam, 2019. "Group formation and cooperation in social dilemmas: A survey and meta-analytic evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 159(C), pages 192-209.
    13. Michael Kosfeld & Akira Okada & Arno Riedl, 2009. "Institution Formation in Public Goods Games," American Economic Review, American Economic Association, vol. 99(4), pages 1335-1355, September.
    14. Douglas Young, 1982. "Voluntary purchase of public goods," Public Choice, Springer, vol. 38(1), pages 73-85, March.
    15. Pierre Courtois & Guillaume Haeringer, 2012. "Environmental cooperation: ratifying second-best agreements," Public Choice, Springer, vol. 151(3), pages 565-584, June.
    16. Anat R. Admati & Motty Perry, 1991. "Joint Projects without Commitment," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 259-276.
    17. Bergstrom, Theodore & Blume, Lawrence & Varian, Hal, 1986. "On the private provision of public goods," Journal of Public Economics, Elsevier, vol. 29(1), pages 25-49, February.
    18. Milgrom, Paul & Roberts, John, 1994. "Comparing Equilibria," American Economic Review, American Economic Association, vol. 84(3), pages 441-459, June.
    19. Jia Liu & Yohanes E. Riyanto, 2017. "The limit to behavioral inertia and the power of default in voluntary contribution games," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 48(4), pages 815-835, April.
    20. Andreoni, James, 1989. "Giving with Impure Altruism: Applications to Charity and Ricardian Equivalence," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1447-1458, December.
    21. John O. Ledyard & Thomas R. Palfrey, 1994. "Voting and Lottery Drafts as Efficient Public Goods Mechanisms," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 61(2), pages 327-355.
    22. 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.
    23. Andreoni, James, 1990. "Impure Altruism and Donations to Public Goods: A Theory of Warm-Glow Giving?," Economic Journal, Royal Economic Society, vol. 100(401), pages 464-477, June.
    24. Nikiforakis, Nikos, 2008. "Punishment and counter-punishment in public good games: Can we really govern ourselves," Journal of Public Economics, Elsevier, vol. 92(1-2), pages 91-112, February.
    25. Edward Clarke, 1971. "Multipart pricing of public goods," Public Choice, Springer, vol. 11(1), pages 17-33, September.
    26. Cornes, Richard & Sandler, Todd, 1984. "Easy Riders, Joint Production, and Public Goods," Economic Journal, Royal Economic Society, vol. 94(375), pages 580-598, September.
    27. Sugden, Robert, 1982. "On the Economics of Philanthropy," Economic Journal, Royal Economic Society, vol. 92(366), pages 341-350, June.
    28. Reuben, Ernesto & Riedl, Arno, 2013. "Enforcement of contribution norms in public good games with heterogeneous populations," Games and Economic Behavior, Elsevier, vol. 77(1), pages 122-137.
    29. John M. Abowd & Ian M. Schmutte, 2019. "An Economic Analysis of Privacy Protection and Statistical Accuracy as Social Choices," American Economic Review, American Economic Association, vol. 109(1), pages 171-202, January.
    30. Ricardo Arlegi & Juan M. Benito-Ostolaza & Nuria Osés-Eraso, 2021. "Participation in and provision of public goods: Does granularity matter?," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 16(2), pages 265-285, April.
    31. Damschroder, Laura J. & Pritts, Joy L. & Neblo, Michael A. & Kalarickal, Rosemarie J. & Creswell, John W. & Hayward, Rodney A., 2007. "Patients, privacy and trust: Patients' willingness to allow researchers to access their medical records," Social Science & Medicine, Elsevier, vol. 64(1), pages 223-235, January.
    32. Atsushi Kajii & Stephen Morris, 1997. "The Robustness of Equilibria to Incomplete Information," Econometrica, Econometric Society, vol. 65(6), pages 1283-1310, November.
    33. Simon Gachter & Ernst Fehr, 2000. "Cooperation and Punishment in Public Goods Experiments," American Economic Review, American Economic Association, vol. 90(4), pages 980-994, September.
    34. Roberts, Russell D, 1984. "A Positive Model of Private Charity and Public Transfers," Journal of Political Economy, University of Chicago Press, vol. 92(1), pages 136-148, February.
    35. Ledyard, John O. & Palfrey, Thomas R., 2002. "The approximation of efficient public good mechanisms by simple voting schemes," Journal of Public Economics, Elsevier, vol. 83(2), pages 153-171, February.
    36. Stefano Duca & Dirk Helbing & Heinrich H. Nax, 2018. "Assortative Matching with Inequality in Voluntary Contribution Games," Computational Economics, Springer;Society for Computational Economics, vol. 52(3), pages 1029-1043, October.
    37. Ananish Chaudhuri, 2011. "Sustaining cooperation in laboratory public goods experiments: a selective survey of the literature," Experimental Economics, Springer;Economic Science Association, vol. 14(1), pages 47-83, March.
    38. Donald B. Marron & Eric J. Toder, 2014. "Tax Policy Issues in Designing a Carbon Tax," American Economic Review, American Economic Association, vol. 104(5), pages 563-568, May.
    39. George A. Akerlof, 1980. "A Theory of Social Custom, of which Unemployment may be One Consequence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 94(4), pages 749-775.
    40. Peter Bohm, 1972. "Estimating the demand for public goods: An experiment," Framed Field Experiments 00126, The Field Experiments Website.
    41. Varian, Hal R., 1994. "Sequential contributions to public goods," Journal of Public Economics, Elsevier, vol. 53(2), pages 165-186, February.
    42. Gangadharan, Lata & Nikiforakis, Nikos, 2009. "Does the size of the action set matter for cooperation?," Economics Letters, Elsevier, vol. 104(3), pages 115-117, September.
    43. van de Kragt, Alphons J. C. & Orbell, John M. & Dawes, Robyn M., 1983. "The Minimal Contributing Set as a Solution to Public Goods Problems," American Political Science Review, Cambridge University Press, vol. 77(1), pages 112-122, March.
    44. Hal R Varian, 2014. "Beyond Big Data," Business Economics, Palgrave Macmillan;National Association for Business Economics, vol. 49(1), pages 27-31, January.
    45. Roberto Burlando & Francesco Guala, 2005. "Heterogeneous Agents in Public Goods Experiments," Experimental Economics, Springer;Economic Science Association, vol. 8(1), pages 35-54, April.
    46. Matthew McGinty & Garrett Milam, 2013. "Public goods provision by asymmetric agents: experimental evidence," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 40(4), pages 1159-1177, April.
    47. Angela Oliveira & Rachel Croson & Catherine Eckel, 2015. "One bad apple? Heterogeneity and information in public good provision," Experimental Economics, Springer;Economic Science Association, vol. 18(1), pages 116-135, March.
    48. Bramoulle, Yann & Kranton, Rachel, 2007. "Public goods in networks," Journal of Economic Theory, Elsevier, vol. 135(1), pages 478-494, July.
    49. Pierre Courtois & Guillaume Haeringer, 2012. "Erratum to: Environmental cooperation: ratifying second-best agreements," Public Choice, Springer, vol. 153(1), pages 261-261, October.
    50. Lugovskyy, Volodymyr & Puzzello, Daniela & Sorensen, Andrea & Walker, James & Williams, Arlington, 2017. "An experimental study of finitely and infinitely repeated linear public goods games," Games and Economic Behavior, Elsevier, vol. 102(C), pages 286-302.
    Full references (including those not matched with items on IDEAS)

    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. Ledyard, John O., "undated". "Public Goods: A Survey of Experimental Research," Working Papers 861, California Institute of Technology, Division of the Humanities and Social Sciences.
    2. Serge-Christophe Kolm, 2008. "Paradoxes of the War on Poverty: Warm-Glows and Efficiency," IDEP Working Papers 0807, Institut d'economie publique (IDEP), Marseille, France, revised 18 Nov 2008.
    3. 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.
    4. Brunner, Eric & Sonstelie, Jon, 2003. "School finance reform and voluntary fiscal federalism," Journal of Public Economics, Elsevier, vol. 87(9-10), pages 2157-2185, September.
    5. Peter Martinsson & Emil Persson, 2019. "Public Goods and Minimum Provision Levels: Does the Institutional Formation Affect Cooperation?," Scandinavian Journal of Economics, Wiley Blackwell, vol. 121(4), pages 1473-1499, October.
    6. Karakostas, Alexandros & Kocher, Martin G. & Matzat, Dominik & Rau, Holger A. & Riewe, Gerhard, 2023. "The team allocator game: Allocation power in public goods games," Games and Economic Behavior, Elsevier, vol. 140(C), pages 73-87.
    7. Grolleau, Gilles & Sutan, Angela & Vranceanu, Radu, 2016. "Do people contribute more to intra-temporal or inter-temporal public goods?," Research in Economics, Elsevier, vol. 70(1), pages 186-195.
    8. Echazu, Luciana & Nocetti, Diego, 2015. "Charitable giving: Altruism has no limits," Journal of Public Economics, Elsevier, vol. 125(C), pages 46-53.
    9. Marie Claire Villeval, 2012. "Contribution au bien public et préférences sociales : Apports récents de l'économie comportementale," Post-Print halshs-00681348, HAL.
    10. Brañas-Garza, Pablo & Molis, Elena & Neyse, Levent, 2021. "Exposure to inequality may cause under-provision of public goods: Experimental evidence," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 92(C).
    11. Ananish Chaudhuri, 2011. "Sustaining cooperation in laboratory public goods experiments: a selective survey of the literature," Experimental Economics, Springer;Economic Science Association, vol. 14(1), pages 47-83, March.
    12. Khadjavi, Menusch & Lange, Andreas & Nicklisch, Andreas, 2014. "The Social Value of Transparency and Accountability: Experimental Evidence from Asymmetric Public Good Games," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100512, Verein für Socialpolitik / German Economic Association.
    13. Daniel McFadden, 2009. "The human side of mechanism design: a tribute to Leo Hurwicz and Jean-Jacque Laffont," Review of Economic Design, Springer;Society for Economic Design, vol. 13(1), pages 77-100, April.
    14. Boadway, Robin & Song, Zhen & Tremblay, Jean-Francois, 2007. "Commitment and matching contributions to public goods," Journal of Public Economics, Elsevier, vol. 91(9), pages 1664-1683, September.
    15. Paul Pecorino, 2015. "Olson’s Logic of Collective Action at fifty," Public Choice, Springer, vol. 162(3), pages 243-262, March.
    16. Diederich, Johannees & Goeschl, Timo, 2014. "Motivational Drivers of the Private Provision of Public Goods: Evidence From a Large Framed Field Experiment," Working Papers 0561, University of Heidelberg, Department of Economics.
    17. Lange, Andreas & List, John A. & Price, Michael K., 2007. "A fundraising mechanism inspired by historical tontines: Theory and experimental evidence," Journal of Public Economics, Elsevier, vol. 91(9), pages 1750-1782, September.
    18. Karen Pittel & Dirk T.G. Rübbelke, 2006. "Private provision of public goods: incentives for donations," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 33(6), pages 497-519, November.
    19. Wichman, Casey J., 2016. "Incentives, green preferences, and private provision of impure public goods," Journal of Environmental Economics and Management, Elsevier, vol. 79(C), pages 208-220.
    20. Christiane Reif & Dirk Rübbelke & Andreas Löschel, 2017. "Improving Voluntary Public Good Provision Through a Non-governmental, Endogenous Matching Mechanism: Experimental Evidence," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 67(3), pages 559-589, July.

    More about this item

    Keywords

    Public goods; Voluntary contribution; Potential maximizer Nash equilibria; Minimum contribution level;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

    Statistics

    Access and download statistics

    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:kap:pubcho:v:201:y:2024:i:1:d:10.1007_s11127-024-01165-1. 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    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.