Dynamic contributions to a public project: the impact of rising marginal benefit and completion benefits

DOI10.3390/G9030043MaRDI QIDQ1630451zbMATH OpenOpenAlexFDO

Authors R. D. Baker, Matthew A. Halloran

Publication date 10 December 2018

Published in Games (Search for Journal in Brave)

Copyright license Creative Commons Attribution 4.0 International

Full work available at URL https://doi.org/10.3390/g9030043

zbMATH Keywords

completion benefitsdynamicpublic goodsrising marginal benefits

Mathematics Subject Classification ID

Experimental studies (91A90) Public goods (91B18)

Review text

Summary: Many public projects are funded in a dynamic manner in which contributors are able to make gradual increases in contributions and condition additional contributions on the cooperation of others. This study presents results from experiments in which subjects with an initial fixed endowment make contributions to a public project gradually over a series of rounds. A \(2\times 2\) experimental design is used to examine the effectiveness of multiple thresholds that once crossed increase the marginal benefit of a contribution to the public project and the existence of a completion benefit upon project completion. Results reveal that when the multiple threshold design is combined with a completion benefit, overall contributions and project completion rates increase relative to other treatments. Without the presence of a completion benefit, contributions in the multiple threshold design are not significantly different from a constant marginal benefit design. In addition, completion benefits are shown to strongly encourage additional cooperation and project completion. Finally, projects are more likely to be completed when substantial contributions occur in the early rounds.

Recommendations

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Cites work

• Dynamic Voluntary Contribution to a Public Project
• Gradualism in Bargaining and Contribution Games
• Matching and challenge gifts to charity: evidence from laboratory and natural field experiments
• Sequential equilibrium in monotone games: A theory-based analysis of experimental data
• Step returns in threshold public goods: A meta- and experimental analysis

Cited in

(2)

• Step returns in threshold public goods: A meta- and experimental analysis
• Bygones in a public project

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• Z-Tree

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