Multilevel Public Goods Game: an Online Experiment

In the multilevel public goods games, subjects face a trade-off between contributing to the provision of a local good or a global good benefiting the whole society. Institutions may attempt to counteract ingroup favouritism by increasing the efficiency of the global public good. In an online experiment, we systematically address all the conflicting results concerning efficiency obtained in the literature. By gradually increasing the relative return of the global good, we find evidence of i. a levelling up in the contribution to the global good, ii. a substitution at the expenses of the local good, and iii. no evidence of an increase in the total contribution to the two groups (i.e. marginal crowding in). We also provide a measure of an intrinsic preference for the local group revealing in-group favouritism and a novel measure of an intrinsic preference for the global good revealing a motivation to contribute to the society independently of efficiency reasons.