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28-06-2022 | Original Paper

Effects of majority-vote reward mechanism on cooperation: a public good experimental study

Author: Hui-Chun Peng

Published in: Social Choice and Welfare | Issue 4/2022

Abstract

This paper conducts a laboratory experiment to examine the effectiveness of majority-vote reward mechanism on cooperation, and to compare its effects with that of peer reward and no reward in the voluntary contribution mechanism. According to the experimental result, it shows that whether individuals have homogeneous or heterogeneous marginal per capita return of the public good, the majority-vote reward mechanism is significantly effective in facilitating cooperation.

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Since this study focus on how different reward mechanisms affect individual contribution decisions, and most previous studies assume the distribution of MPCRs is common knowledge, this study uses the same experimental setting. How the information related to the distribution of MPCRs affects the contribution may be an interesting future research direction.

Previous studies, such as Walker and Halloran (2004), Sefton et al. (2007), and Casari and Luini (2009), and Choi and Ahn (2013), also conduct the VCM condition before the punishment/reward condition.

Although subjects are likely to interact multiple times, they are not informed the identity of others.

It is equal to USD 18.02.

All non-parametric statistical tests in this study are two-tailed.

I conduct the WSR test. VCM situation: \(Z = 2.52\), \(p = 0.01\) for low-MCPR vs median-MPCR; \(Z = 2.52\), \(p = 0.01\) for low-MCPR vs high-MPCR; \(Z =2.38\), \(p = 0.02\) for median-MCPR vs high-MPCR. Peer situation: \(Z = 2.52\), \(p = 0.01\) for low-MCPR vs median-MPCR; \(Z = 2.52\), \(p = 0.01\) for low-MCPR vs high-MPCR; \(Z = 2.24\), \(p = 0.03\) for median-MCPR vs high-MPCR. Vote situation: \(Z = 2.52\), \(p = 0.01\) for low-MCPR vs median-MPCR; \(Z = 2.52\), \(p = 0.01\) for low-MCPR vs high-MPCR; \(Z = 1.26\), \(p = 0.21\) for median-MCPR vs high-MPCR.

Let \(g_{i}\) represent subject i’s contribution and \({\bar{G}}_{-i}\) be the average contribution of other group members. The positive deviation is defined as \(max\lbrace g_{i} - {\bar{G}}_{-i},0\rbrace\) and the absolute negative deviation is defined as \(max\lbrace {\bar{G}}_{-i} - g_{i},0\rbrace\).

I conduct the WSR test. O-VCM vs. O-Peer: \(Z= -2.28\), \(p = 0.02\); O-VCM vs. O-Vote: \(Z = -2.52\), \(p= 0.01\); O-Peer vs. O-Vote: \(Z = -2.52\), \(p = 0.01\); E-VCM vs. E-Peer: \(Z = -0.14\), \(p = 0.89\); E-VCM vs. E-Vote: \(Z = -1.68\), \(p= 0.09\); E-peer vs. E-Vote: \(Z = -1.54\), \(p = 0.12\).

I conduct the WSR test. O-VCM vs. O-Peer: \(Z= 1.68\), \(p = 0.09\); O-VCM vs. O-Vote: \(Z = -1.54\), \(p= 0.12\); O-Peer vs. O-Vote: \(Z = -2.38\), \(p = 0.02\); E-VCM vs. E-Peer: \(Z = 1.96\), \(p = 0.05\); E-VCM vs. E-Vote: \(Z = 0.84\), \(p= 0.40\); E-peer vs. E-Vote: \(Z = -2.24\), \(p = 0.03\).

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Title: Effects of majority-vote reward mechanism on cooperation: a public good experimental study
Author: Hui-Chun Peng
Publication date: 28-06-2022
Publisher: Springer Berlin Heidelberg
Published in: Social Choice and Welfare / Issue 4/2022
Print ISSN: 0176-1714
Electronic ISSN: 1432-217X
DOI: https://doi.org/10.1007/s00355-022-01417-3

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