Alternative rebate rules in the provision of a threshold public good: An experimental investigation

Melanie Beth Marks · Rachel T. A. Croson

206 citations0/0 files storedJournal of Public Economics

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Experimental Behavioral Economics Studies Game Theory and Voting Systems Economic Policies and Impacts

Abstract

This study reports the effects of rebate rules on voluntary contributions to a threshold public good. Rebate rules specify how excess contributions, over the threshold amount are distributed. We examine three rebate rules experimentally: a no rebate policy where excess contributions are discarded, a proportional rebate policy where excess contributions are rebated proportionally to an individual's contribution, and a utilization rebate policy where excess contributions provide some continuous public good. Significantly more Nash equilibrium outcomes are observed under the no rebate treatment than under either of the other two. Interestingly, the variance of contributions differs significantly between rebate treatments.

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References

1960The Strategy of Conflict 1995Learning in extensive-form games: Experimental data and simple dynamic models in the intermediate term 1981Economists free ride, does anyone else?1979Experiments on the Provision of Public Goods. I. Resources, Interest, Group Size, and the Free-Rider Problem 1984Divergent evidence on free riding: An experimental examination of possible explanations 1989Provision of Public Goods: Fully Implementing the Core through Private Contributions 2013Research in experimental economics 1986Organizing Groups for Collective Action

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