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Experimental (re-)analysis of the house-money effect in a public goods game

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  • Nicholas T. Bailey

    (Deloitte)

  • Abhijit Ramalingam

    (Appalachian State University, Peacock Hall)

  • Brock V. Stoddard

    (Appalachian State University, Peacock Hall)

Abstract

Experiments in economics usually provide subjects with starting capital to be used in the experiment. This practice could affect decisions as there is no risk of loss. This phenomenon is known as the house-money effect. In a repeated public goods game, we test for house-money effects by paying subjects in advance an amount they could lose in the experiment. We do not find evidence of a house-money effect over time.

Suggested Citation

  • Nicholas T. Bailey & Abhijit Ramalingam & Brock V. Stoddard, 2023. "Experimental (re-)analysis of the house-money effect in a public goods game," Journal of the Economic Science Association, Springer;Economic Science Association, vol. 9(1), pages 1-14, June.
    • Handle: RePEc:spr:jesaex:v:9:y:2023:i:1:d:10.1007_s40881-022-00122-2
    DOI: 10.1007/s40881-022-00122-2
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    2. Catola Marco & Guarnieri Pietro & Marcon Laura & Spadoni Lorenzo, 2024. "Real-effort in the Multilevel Public Goods Game," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 24(3), pages 965-974.

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    More about this item

    Keywords

    House-money; Cooperation; Public goods; Experiment;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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