Voluntary Partnerships For Equally Sharing Contribution Costs
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.