Step Returns in Threshold Public Goods: A Meta- and Experimental Analysis

Rachel T. A. Croson · Melanie Beth Marks

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

Abstract

Abstract One important determinant of voluntary contributions to public goods is the value of the public good relative to that of the forgone private good. Isaac, Walker and Thomas (1984) formalized this relation in the Marginal Per Capita Return (MPCR) and demonstrated its influence on the provision of linear public goods. This paper develops a parallel concept, in the context of a threshold public good, the Step Return (SR). After providing a meta-analysis of the effect of SR in previous experiments, we compare contributions in threshold public goods games with low, medium and high SRs. Results show that subjects respond to the SR in this setting just as they respond to the MPCR in the linear public goods setting: higher SRs lead to more contributions.

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References

1990Impure Altruism and Donations to Public Goods: A Theory of Warm-Glow Giving 1995The Handbook of experimental economics 19952. Public Goods: A Survey of Experimental Research 1993Experimental Economics 1984Divergent evidence on free riding: An experimental examination of possible explanations 1996Value Orientations, Expectations and Voluntary Contributions in Public Goods 1986Organizing Groups for Collective Action 1983The Minimal Contributing Set as a Solution to Public Goods Problems

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