IDEAS home Printed from https://ideas.repec.org/p/zbw/euvwdp/379.html
   My bibliography  Save this paper

Not efficient but payoff dominant: Experimental investigations of equilibrium play in binary threshold public good games

Author

Listed:
  • Bolle, Friedel
  • Spiller, Jörg

Abstract

In Binary Threshold Public Good (BTPG) games players contribute or not to the production of a public good which is produced if and only if there are "enough" contributors. There is a plethora of equilibria in BTPG games. We experimentally test general theoretical attributes of equilibria and proposals for equilibrium selection. As theory predicts, if the cost/benefit ratio is the same, then subjects play (almost) the same mixture of strategies and, after switching from a positive to a negative frame, the theoretically expected "mirrored" behavior can be observed, i.e. contrary to most linear Public Good experiments we do not find a framing effect. A finite mixture model successfully (i.e. without rejection in a chi-square test) describes behavior in all eight experimental games (same parameters for four thresholds and positive/negative frame). The Harsanyi-Selten theory of equilibrium selection is moderately supported. Efficiency as an equilibrium selection device and also risk dominance are clearly rejected.

Suggested Citation

  • 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.
    • Handle: RePEc:zbw:euvwdp:379
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/129201/1/84871198X.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. James Andreoni, 1995. "Warm-Glow versus Cold-Prickle: The Effects of Positive and Negative Framing on Cooperation in Experiments," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(1), pages 1-21.
    2. Chen, Xiao-Ping & Au, Wing Tung & Komorita, S. S., 1996. "Sequential Choice in a Step-Level Public Goods Dilemma: The Effects of Criticality and Uncertainty," Organizational Behavior and Human Decision Processes, Elsevier, vol. 65(1), pages 37-47, January.
    3. Dufwenberg, Martin & Gächter, Simon & Hennig-Schmidt, Heike, 2011. "The framing of games and the psychology of play," Games and Economic Behavior, Elsevier, vol. 73(2), pages 459-478.
    4. Bartling, Björn & Fischbacher, Urs & Schudy, Simeon, 2015. "Pivotality and responsibility attribution in sequential voting," Journal of Public Economics, Elsevier, vol. 128(C), pages 133-139.
    5. 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.
    6. 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.
    7. Rydval, Ondrej & Ortmann, Andreas, 2005. "Loss avoidance as selection principle: Evidence from simple stag-hunt games," Economics Letters, Elsevier, vol. 88(1), pages 101-107, July.
    8. Newey, Whitney K & West, Kenneth D, 1987. "Hypothesis Testing with Efficient Method of Moments Estimation," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 28(3), pages 777-787, October.
    9. Axel Franzen, 1995. "Group Size and One-Shot Collective Action," Rationality and Society, , vol. 7(2), pages 183-200, April.
    10. Battalio, Raymond & Samuelson, Larry & Van Huyck, John, 2001. "Optimization Incentives and Coordination Failure in Laboratory Stag Hunt Games," Econometrica, Econometric Society, vol. 69(3), pages 749-764, May.
    11. Anthony Downs, 1957. "An Economic Theory of Political Action in a Democracy," Journal of Political Economy, University of Chicago Press, vol. 65(2), pages 135-135.
    12. 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.
    13. 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.
    14. Sonnemans, Joep & Schram, Arthur & Offerman, Theo, 1998. "Public good provision and public bad prevention: The effect of framing," Journal of Economic Behavior & Organization, Elsevier, vol. 34(1), pages 143-161, January.
    15. Park, Eun-Soo, 2000. "Warm-glow versus cold-prickle: a further experimental study of framing effects on free-riding," Journal of Economic Behavior & Organization, Elsevier, vol. 43(4), pages 405-421, December.
    16. Willinger, Marc & Ziegelmeyer, Anthony, 1999. "Framing and cooperation in public good games: an experiment with an interior solution," Economics Letters, Elsevier, vol. 65(3), pages 323-328, December.
    17. Ernst Fehr & Simon Gächter, 2002. "Altruistic punishment in humans," Nature, Nature, vol. 415(6868), pages 137-140, January.
    18. Kritikos, Alexander & Bolle, Friedel, 2001. "Distributional concerns: equity- or efficiency-oriented?," Economics Letters, Elsevier, vol. 73(3), pages 333-338, December.
    19. Al-Ubaydli, Omar & Jones, Garett & Weel, Jaap, 2010. "Patience, cognitive skill and coordination in the repeated stag hunt," MPRA Paper 27723, University Library of Munich, Germany.
    20. Tan, Jonathan H.W. & Breitmoser, Yves & Bolle, Friedel, 2015. "Voluntary contributions by consent or dissent," Games and Economic Behavior, Elsevier, vol. 92(C), pages 106-121.
    21. 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.
    22. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer;Economic Science Association, vol. 10(2), pages 171-178, June.
    23. Dirk Engelmann & Martin Strobel, 2004. "Inequality Aversion, Efficiency, and Maximin Preferences in Simple Distribution Experiments," American Economic Review, American Economic Association, vol. 94(4), pages 857-869, September.
    24. Urs Fischbacher & Werner Güth & M. Vittoria Levati, 2011. "Crossing the Point of No Return: A Public Goods Experiment," Jena Economics Research Papers 2011-059, Friedrich-Schiller-University Jena.
    25. Diekmann, Andreas, 1993. "Cooperation in an Asymmetric Volunteer's Dilemma Game: Theory and Experimental Evidence," International Journal of Game Theory, Springer;Game Theory Society, vol. 22(1), pages 75-85.
    26. Palfrey, Thomas R. & Rosenthal, Howard, 1991. "Testing for effects of cheap talk in a public goods game with private information," Games and Economic Behavior, Elsevier, vol. 3(2), pages 183-220, May.
    27. Ido Erev & Amnon Rapoport, 1990. "Provision of Step-Level Public Goods," Journal of Conflict Resolution, Peace Science Society (International), vol. 34(3), pages 401-425, September.
    28. Nick Feltovich & Philip J. Grossman, 2013. "The effect of group size and cheap talk in the multi-player stag hunt: experimental evidence," Monash Economics Working Papers 52-13, Monash University, Department of Economics.
    29. 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.
    30. Dawes, Robyn M. & Orbell, John M. & Simmons, Randy T. & Van De Kragt, Alphons J. C., 1986. "Organizing Groups for Collective Action," American Political Science Review, Cambridge University Press, vol. 80(4), pages 1171-1185, December.
    31. Goren, Harel & Kurzban, Robert & Rapoport, Amnon, 2003. "Social loafing vs. social enhancement: Public goods provisioning in real-time with irrevocable commitments," Organizational Behavior and Human Decision Processes, Elsevier, vol. 90(2), pages 277-290, March.
    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. 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).
    2. 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.
    3. Friedel Bolle & Philipp E. Otto, 2022. "The flip side of power," Public Choice, Springer, vol. 190(1), pages 75-92, January.
    4. Bolle, Friedel, 2017. "A behavioral theory of equilibrium selection," Discussion Papers 392, European University Viadrina Frankfurt (Oder), Department of Business Administration and Economics.
    5. Friedel Bolle & Jörg Spiller, 2021. "Cooperation against all predictions," Economic Inquiry, Western Economic Association International, vol. 59(3), pages 904-924, July.
    6. Friedel Bolle, 2014. "Binary Threshold Public Goods," Discussion Paper Series RECAP15 14, RECAP15, European University Viadrina, Frankfurt (Oder).
    7. Antoni Bosch-Domènech & Joaquim Silvestre, 2017. "The role of frames, numbers and risk in the frequency of cooperation," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 64(3), pages 245-267, September.
    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. 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.
    10. Chaudhuri, Ananish & Li, Yaxiong & Paichayontvijit, Tirnud, 2016. "What’s in a frame? Goal framing, trust and reciprocity," Journal of Economic Psychology, Elsevier, vol. 57(C), pages 117-135.
    11. Korenok, Oleg & Millner, Edward L. & Razzolini, Laura, 2018. "Taking aversion," Journal of Economic Behavior & Organization, Elsevier, vol. 150(C), pages 397-403.
      • Korenok Oleg & Edward L. Millner & Laura Razzolini, 2017. "Taking Aversion," Working Papers 1702, VCU School of Business, Department of Economics.
    12. Menusch Khadjavi & Andreas Lange, 2015. "Doing good or doing harm: experimental evidence on giving and taking in public good games," Experimental Economics, Springer;Economic Science Association, vol. 18(3), pages 432-441, September.
    13. Thunström, Linda, 2019. "Preferences for fairness over losses," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 83(C).
    14. 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.
    15. Isaksen, Elisabeth Thuestad & Brekke, Kjell Arne & Richter, Andries, 2019. "Positive framing does not solve the tragedy of the commons," Journal of Environmental Economics and Management, Elsevier, vol. 95(C), pages 45-56.
    16. Riyanto, Yohanes E. & Roy, Nilanjan, 2019. "Path of intertemporal cooperation and limits to turn-taking behavior," Journal of Economic Behavior & Organization, Elsevier, vol. 165(C), pages 21-36.
    17. Gerrit Frackenpohl & Adrian Hillenbrand & Sebastian Kube, 2016. "Leadership effectiveness and institutional frames," Experimental Economics, Springer;Economic Science Association, vol. 19(4), pages 842-863, December.
    18. 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.
    19. Cubitt, Robin P. & Drouvelis, Michalis & Gächter, Simon & Kabalin, Ruslan, 2011. "Moral judgments in social dilemmas: How bad is free riding?," Journal of Public Economics, Elsevier, vol. 95(3), pages 253-264.
    20. Gee, Laura K. & Schreck, Michael J., 2018. "Do beliefs about peers matter for donation matching? Experiments in the field and laboratory," Games and Economic Behavior, Elsevier, vol. 107(C), pages 282-297.

    More about this item

    Keywords

    Binary Threshold Public Goods; framing; equilibrium selection; payoff dominance; risk dominance; efficiency; experiment;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

    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:zbw:euvwdp:379. 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: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/fwffode.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.