IDEAS home Printed from https://ideas.repec.org/p/twi/respas/0072.html
   My bibliography  Save this paper

Crossing the Point of No Return: A Public Goods Experiment

Author

Listed:
  • Urs Fischbacher
  • Werner G�th
  • M. Vittoria Levati

Abstract

Participants in a public goods experiment receive private or common signals regarding the so-called 'point of no return', meaning that if the group�s total contribution falls below this point, all payoffs are reduced. An individual faces the usual conflict between private and collective interests above the point of no return, while he incurs the risk of damaging everyone by not surpassing the point. Our data reveal that contributions are higher if the cost of not reaching the threshold is high. In particular if the signal is private, many subjects are not willing to provide the necessary contribution.

Suggested Citation

  • Urs Fischbacher & Werner G�th & M. Vittoria Levati, 2011. "Crossing the Point of No Return: A Public Goods Experiment," TWI Research Paper Series 72, Thurgauer Wirtschaftsinstitut, Universität Konstanz.
    • Handle: RePEc:twi:respas:0072
    as

    Download full text from publisher

    File URL: https://www.twi-kreuzlingen.ch/wp-content/uploads/2017/12/twi-rps-072-fischbacher-gueth-levati-2011-12.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Rapoport, Amnon & Suleiman, Ramzi, 1993. "Incremental Contribution in Step-Level Public Goods Games with Asymmetric Players," Organizational Behavior and Human Decision Processes, Elsevier, vol. 55(2), pages 171-194, July.
    2. Fischbacher, Urs & Gachter, Simon & Fehr, Ernst, 2001. "Are people conditionally cooperative? Evidence from a public goods experiment," Economics Letters, Elsevier, vol. 71(3), pages 397-404, June.
    3. Rondeau, Daniel & D. Schulze, William & Poe, Gregory L., 1999. "Voluntary revelation of the demand for public goods using a provision point mechanism," Journal of Public Economics, Elsevier, vol. 72(3), pages 455-470, June.
    4. Gerald Eisenkopf, 2007. "Learning and Peer Effects," TWI Research Paper Series 16, Thurgauer Wirtschaftsinstitut, Universität Konstanz.
    5. Rachel Croson & Melanie Marks, 2000. "Step Returns in Threshold Public Goods: A Meta- and Experimental Analysis," Experimental Economics, Springer;Economic Science Association, vol. 2(3), pages 239-259, March.
    6. Ernst Fehr & Klaus M. Schmidt, 1999. "A Theory of Fairness, Competition, and Cooperation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(3), pages 817-868.
    7. Axel Ockenfels & Gary E. Bolton, 2000. "ERC: A Theory of Equity, Reciprocity, and Competition," American Economic Review, American Economic Association, vol. 90(1), pages 166-193, March.
    8. 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.
    9. Marks, Melanie B & Croson, Rachel T A, 1999. "The Effect of Incomplete Information in a Threshold Public Goods Experiment," Public Choice, Springer, vol. 99(1-2), pages 103-118, April.
    10. Rondeau, Daniel & Poe, Gregory L. & Schulze, William D., 2005. "VCM or PPM? A comparison of the performance of two voluntary public goods mechanisms," Journal of Public Economics, Elsevier, vol. 89(8), pages 1581-1592, August.
    11. Spencer, Michael A. & Swallow, Stephen K. & Shogren, Jason F. & List, John A., 2009. "Rebate rules in threshold public good provision," Journal of Public Economics, Elsevier, vol. 93(5-6), pages 798-806, June.
    12. Freytag, Andreas & Güth, Werner & Koppel, Hannes & Wangler, Leo, 2014. "Is regulation by milestones efficiency enhancing? An experimental study of environmental protection," European Journal of Political Economy, Elsevier, vol. 33(C), pages 71-84.
    13. Bram Cadsby, Charles & Maynes, Elizabeth, 1998. "Choosing between a socially efficient and free-riding equilibrium: Nurses versus economics and business students," Journal of Economic Behavior & Organization, Elsevier, vol. 37(2), pages 183-192, October.
    14. Asher, Sam & Casaburi, Lorenzo & Nikolov, Plamen & Ye, Maoliang, 2009. "One Step at a Time: Do Threshold Patterns Matter in Public Good Provision?," Economics Discussion Papers 2009-5, Kiel Institute for the World Economy (IfW Kiel).
    15. Bagnoli, Mark & McKee, Michael, 1991. "Voluntary Contribution Games: Efficient Private Provision of Public Goods," Economic Inquiry, Western Economic Association International, vol. 29(2), pages 351-366, April.
    16. van Dijk, Eric & Grodzka, Malgorzata, 1992. "The influence of endowments asymmetry and information level on the contribution to a public step good," Journal of Economic Psychology, Elsevier, vol. 13(2), pages 329-342, June.
    17. 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.
    18. Offerman, Theo & Schram, Arthur & Sonnemans, Joep, 1998. "Quantal response models in step-level public good games," European Journal of Political Economy, Elsevier, vol. 14(1), pages 89-100, February.
    19. Marks, Melanie & Croson, Rachel, 1998. "Alternative rebate rules in the provision of a threshold public good: An experimental investigation," Journal of Public Economics, Elsevier, vol. 67(2), pages 195-220, February.
    20. Greiner, Ben, 2004. "An Online Recruitment System for Economic Experiments," MPRA Paper 13513, University Library of Munich, Germany.
    21. R. Isaac & David Schmidtz & James Walker, 1989. "The assurance problem in a laboratory market," Public Choice, Springer, vol. 62(3), pages 217-236, September.
    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. Bolle, Friedel & Spiller, Jörg, 2016. "Not efficient but payoff dominant: Experimental investigations of equilibrium play in binary threshold public good games," Discussion Papers 379, European University Viadrina Frankfurt (Oder), Department of Business Administration and Economics.
    2. Doruk İriş & Jungmin Lee & Alessandro Tavoni, 2015. "Delegation and public pressure in a threshold public goods game: theory and experimental evidence," GRI Working Papers 186, Grantham Research Institute on Climate Change and the Environment.
    3. Doruk İriş & Jungmin Lee & Alessandro Tavoni, 2015. "Delegation and public pressure in a threshold public goods game: theory and experimental evidence," GRI Working Papers 186, Grantham Research Institute on Climate Change and the Environment.
    4. Freytag, Andreas & Güth, Werner & Koppel, Hannes & Wangler, Leo, 2014. "Is regulation by milestones efficiency enhancing? An experimental study of environmental protection," European Journal of Political Economy, Elsevier, vol. 33(C), pages 71-84.
    5. Jörg Spiller & Friedel Bolle, 2017. "Experimental investigations of coordination games: high success rates, invariant behavior, and surprising dynamics," Discussion Paper Series RECAP15 28, RECAP15, European University Viadrina, Frankfurt (Oder).
    6. Spiller, Jörg & Bolle, Friedel, 2017. "Experimental investigations of binary threshold public good games," Discussion Papers 393, European University Viadrina Frankfurt (Oder), Department of Business Administration and Economics.
    7. Brekke, Kjell Arne & Konow, James & Nyborg, Karine, 2017. "Framing in a threshold public goods experiment with heterogeneous endowments," Journal of Economic Behavior & Organization, Elsevier, vol. 138(C), pages 99-110.

    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. James Andreoni & Laura Gee, 2015. "Gunning for efficiency with third party enforcement in threshold public goods," Experimental Economics, Springer;Economic Science Association, vol. 18(1), pages 154-171, March.
    2. Francesco Bripi & Daniela Grieco, 2023. "Participatory incentives," Experimental Economics, Springer;Economic Science Association, vol. 26(4), pages 813-849, September.
    3. Güth, Werner & Levati, M. Vittoria & Soraperra, Ivan, 2015. "Common and private signals in public goods games with a point of no return," Resource and Energy Economics, Elsevier, vol. 41(C), pages 164-184.
    4. Swallow, Stephen K. & Anderson, Christopher M. & Uchida, Emi, 2018. "The Bobolink Project: Selling Public Goods From Ecosystem Services Using Provision Point Mechanisms," Ecological Economics, Elsevier, vol. 143(C), pages 236-252.
    5. Rachel Croson & Melanie Marks, 2000. "Step Returns in Threshold Public Goods: A Meta- and Experimental Analysis," Experimental Economics, Springer;Economic Science Association, vol. 2(3), pages 239-259, March.
    6. Yin, Xile & Li, Jianbiao & Bao, Te, 2019. "Does overconfidence promote cooperation? Theory and experimental evidence," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 79(C), pages 119-133.
    7. Grigoriadis, Theocharis, 2017. "Religion, administration & public goods: Experimental evidence from Russia," Economic Modelling, Elsevier, vol. 66(C), pages 42-60.
    8. 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.
    9. Charles Cadsby & Rachel Croson & Melanie Marks & Elizabeth Maynes, 2008. "Step return versus net reward in the voluntary provision of a threshold public good: An adversarial collaboration," Public Choice, Springer, vol. 135(3), pages 277-289, June.
    10. 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.
    11. Philippe Le Coent & Raphaële Préget & Sophie Thoyer, 2015. "Can collective conditionality improve agri-environmental contracts? Insights from experimental economics," Post-Print hal-01606341, HAL.
    12. Felix Koelle, 2012. "Heterogeneity and Cooperation in Privileged Groups: The Role of Capability and Valuation on Public Goods Provision," Cologne Graduate School Working Paper Series 03-08, Cologne Graduate School in Management, Economics and Social Sciences.
    13. David McEvoy, 2010. "Not it: opting out of voluntary coalitions that provide a public good," Public Choice, Springer, vol. 142(1), pages 9-23, January.
    14. Simona Cicognani & Anna D’Ambrosio & Werner Güth & Simone Pfuderer & Matteo Ploner, 2015. "Community projects: an experimental analysis of a fair implementation process," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 44(1), pages 109-132, January.
    15. Robertas Zubrickas, 2013. "The provision point mechanism with reward money," ECON - Working Papers 114, Department of Economics - University of Zurich, revised Oct 2013.
    16. Tatsuki Homma & Ryosuke Iba & Junyi Shen & Takuma Wakayama & Hirofumi Yamamura & Takehiko Yamato, 2022. "The pivotal mechanism versus the voluntary contribution mechanism: an experimental comparison," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 58(3), pages 429-505, April.
    17. Philippe Le Coent & Raphaële Préget & Sophie Thoyer, 2014. "Why pay for nothing? An experiment on a conditional subsidy scheme in a threshold public good game," Economics Bulletin, AccessEcon, vol. 34(3), pages 1976-1989.
    18. Luca Corazzini, Christopher Cotton, Paola Valbonesi, 2012. "Salience, Coordination and Cooperation in Contributing to Threshold Public Goods," ISLA Working Papers 44, ISLA, Centre for research on Latin American Studies and Transition Economies, Universita' Bocconi, Milano, Italy.
    19. Todd Cherry & David McEvoy, 2013. "Enforcing Compliance with Environmental Agreements in the Absence of Strong Institutions: An Experimental Analysis," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 54(1), pages 63-77, January.
    20. 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.

    More about this item

    Keywords

    Public goods; provision point mechanism; experiments; reduction factor; signal;
    All these keywords.

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:twi:respas:0072. 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: Urs Fischbacher (email available below). General contact details of provider: https://edirc.repec.org/data/twikrch.html .

    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.