09:30 - 11:00
Fri-PS4
Chair/s:
Esther Blanco
Room: Floor 4, Novo Banco
Danae Arroyos-Calvera - Risk and Plausible Deniability in Public Good Games
Lorenzo Spadoni - Voluntary Partnerships For Equally Sharing Contribution Costs
Esther Blanco - Institution Formation in the Weakest Link Game with Fixed Neighborhoods
Voluntary Partnerships For Equally Sharing Contribution Costs
Lorenzo Spadoni 1, Irene Buso 2, Daniela Di Cagno 3, Werner Gueth 4
1 Department of Economics and Law, University of Cassino and Southern Lazio, Cassino, Italy
2 Department of Economics, Ca’ Foscari University of Venice, Venice, Italy
3 Department of Economics and Finance, Luiss University, Rome, Italy,
4 Max–Planck-Institute for Research on Collective Goods, Bonn, Germany
We propose an institutional mechanism resembling some field regulations for collective action like unions, cartels and international alliances. Before voluntarily contributing to the public good contributors can commit whether to join or not the (sub)group whose partners equally share their contribution cost. According to the theoretical analysis stable cost sharing partnerships can limit freeriding (partners of stable group fully contribute whereas possible outsiders freeride) but would not avoid freeriding incentives completely in case of outsiders. Our data show that individual joining behavior is not in line with benchmark predictions: neither are partnerships always formed and, if so, not always stable nor do partners always contribute maximally and outsiders always contribute minimally. Nevertheless, we confirm systematic partnership formation which considerably improves public good provision. In addition to offering a mechanism for enhancing voluntary cooperation we illustrate how individual (joining) profiles can account for the considerable heterogeneity of individual behavior as well as of the different outcomes of randomly formed player (and rematching) groups. The experimental evidence suggests that behavioral regularities like "always joining" and "never joining" profiles stick out, as well as the systematic willingness to form grand partnerships.