Endowment Effects and Contribution Strategies in Public Good Experiments

  • John Weis Gettysburg College, 300 North Washington Street, Gettysburg, PA 17325, USA
  • John Cadigan Gettysburg College, 300 North Washington Street, Gettysburg, PA 17325, USA
  • Pamela Schmitt U. S. Naval Academy, Department of Economics, 589 McNair Rd, Annapolis, MD 21402, USA
  • Kurtis Swope U. S. Naval Academy, Department of Economics, 589 McNair Rd, Annapolis, MD 21402, USA

Abstract

 


Abstract: We investigate behavior in a laboratory public good experiment with unique endowment schemes that allow a wider range of contribution strategies than in standard voluntary contribution mechanism (VCM) experiments. A baseline treatment follows a standard VCM design (subjects receive 10 tokens in each of 10 rounds that may be allocated between a private account and a group account). In a new carry-over treatment, any tokens not allocated to the group account in the current period are made available for contributions in future periods. Under full endowment, subjects receive 100 tokens in round one (rather than 10 tokens per round for each of 10 rounds). In the pledge treatment, subjects’ allocation decisions for an initial endowment of 100 tokens may be changed in any round and are binding only for the final round. We find that the size of the effective endowment and whether contributions are binding significantly impact subject decision making. Deviations from the free riding outcome are greater when subjects have a larger portion of their total endowment earlier in the experiment, and subjects contribute less when their contribution decisions are binding.

Author Biographies

John Weis, Gettysburg College, 300 North Washington Street, Gettysburg, PA 17325, USA

Gettysburg College

John Cadigan, Gettysburg College, 300 North Washington Street, Gettysburg, PA 17325, USA

Department of Economics

Phone: 00-1-717-337-6667

Pamela Schmitt, U. S. Naval Academy, Department of Economics, 589 McNair Rd, Annapolis, MD 21402, USA

Department of Economics,

Phone: 00-1-410-293-6892, Fax: 00-1-410-293-6888

Kurtis Swope, U. S. Naval Academy, Department of Economics, 589 McNair Rd, Annapolis, MD 21402, USA

Department of Economics

Phone: 00-1-410-293-6892, Fax: 00-1-410-293-6899

Published
2017-10-15
How to Cite
WEIS, John et al. Endowment Effects and Contribution Strategies in Public Good Experiments. Archives of Psychology, [S.l.], v. 1, n. 1, oct. 2017. ISSN 2573-7902. Available at: <https://archivesofpsychology.org/index.php/aop/article/view/17>. Date accessed: 17 sep. 2019.

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