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Beyond perfect substitutability in public good games: heterogeneous structures of preferences

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  • Marion Dupoux

    (University of Gothenburg)

Abstract

The literature on public good games is very focused on the additive separability of the values of the private and the public goods. Yet, the additive structure underlies a perfect substitutability relationship between private and public goods, which is a strong assumption. This paper studies the effect of payoff/preference structures on contributions to the public good within a voluntary contributions experiment in both homogeneous and heterogeneous groups. Within the structure of substitutability, I find that subjects free-ride more often when they interact with subjects of the other type (complementarity) for whom it is optimal to contribute. Introducing such a heterogeneity may provide a method for the identification of free-riders. Nonetheless, an advantageous inequality aversion emerges as well. This means that under perfect substitutability, subjects tend to dislike earning too much compared to their group member whose payoffs underlie complementarity, a more constraining structure.

Suggested Citation

  • Marion Dupoux, 2017. "Beyond perfect substitutability in public good games: heterogeneous structures of preferences," Working Papers 2017.21, FAERE - French Association of Environmental and Resource Economists.
    • Handle: RePEc:fae:wpaper:2017.21
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    References listed on IDEAS

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    More about this item

    Keywords

    public good game; substitutability/complementarity; structure of payoffs; free-riding; inequality;
    All these keywords.

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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