Top

Journal of Economic Interaction and Coordination

Published in:

17-07-2020 | Regular Article

Participation in and provision of public goods: Does granularity matter?

Authors: Ricardo Arlegi, Juan M. Benito-Ostolaza, Nuria Osés-Eraso

Published in: Journal of Economic Interaction and Coordination | Issue 2/2021

Activate our intelligent search to find suitable subject content or patents.

search-config

AI-assisted search

Off

Abstract

We use public goods games to experimentally investigate the effect of granularity (i.e., the degree of divisibility of the space of feasible contribution options) on participation (whether individuals contribute or not to the public good) and public goods provision (total contribution to the public good). Our results show that granularity has a significant effect on participation, mainly when coarser granularity eliminates the possibility of small contributions. However, this change in participation does not lead to a significant change in the total provision of the public good. These results are aligned with other experimental field results obtained in the context of donations and fundraising.

previous article Hand-to-mouth consumers, rule-of-thumb savers, and optimal control

next article The nonlinear distribution of employment across municipalities

Dont have a licence yet? Then find out more about our products and how to get one now:

Springer Professional "Wirtschaft+Technik"

Online-Abonnement

Mit Springer Professional "Wirtschaft+Technik" erhalten Sie Zugriff auf:

über 102.000 Bücher
über 537 Zeitschriften

aus folgenden Fachgebieten:

Automobil + Motoren
Bauwesen + Immobilien
Business IT + Informatik
Elektrotechnik + Elektronik
Energie + Nachhaltigkeit
Finance + Banking
Management + Führung
Marketing + Vertrieb
Maschinenbau + Werkstoffe
Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

inform now

Springer Professional "Wirtschaft"

Online-Abonnement

Mit Springer Professional "Wirtschaft" erhalten Sie Zugriff auf:

über 67.000 Bücher
über 340 Zeitschriften

aus folgenden Fachgebieten:

Bauwesen + Immobilien
Business IT + Informatik
Finance + Banking
Management + Führung
Marketing + Vertrieb
Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

inform now

An example of the risk of the provision of a public good depending heavily on large contributors is the withdrawal of US funding to the WHO following the onset the Covid-19 pandemic. Through assessed contributions (dues paid by member countries based on income and population) and voluntary contributions, US contributions account for 20% of the WHO budget (Huang 2020).

The case of the American Heart Association is similar. The options are $40, $60, $100, $250 or introduce another amount. The anchor point here is $100. This is a general strategy that can be found in other institutions like Greenpeace, the World Wildlife Fund or the Global Footprint Network.

Almost-continuous in the case of Gangadharan and Nikiforakis (2009).

The meaning of “sufficiently small” is explained more explicitly below.

Among the literature, $T\infty $ and T2 are known as the continuous and the all-or-nothing settings, respectively Cadsbya and Maynesb 1999; Gangadharan and Nikiforakis 2009; Zhang et al. 2013.

In treatment $T\infty $ contributions in fractions of units were permitted, so it was possible to contribute less than 1.

The participants received a payment of 0.25 Euros per correct answer.

The Raven test is a nonverbal multiple-choice intelligence test for abstract reasoning, (Raven 1936). In each item of the test, the participant is asked to identify the missing element that completes a visual pattern. This test is recognized as a leading measure of analytic intelligence (see Brañas Garza et al. 2012; Carpenter et al. 1990; Gray and Thompson 2004, for detailed information).

We thank an anonymous referee for this idea.

Social planners may possibly have other reasons for facilitating richer spaces of contribution which rely, for example, on theories that defend the intrinsically attainable value of having freedom of choice (see, for example, Sen 1988; Pattanaik and Xu 1990; Gravel 1994; Bartling et al. 2014).

Anderson LR, Mellor JM, Milyo J (2004) Social capital and contributions in a public-goods experiment. Am Econ Rev 94(2):373–376

Andreoni J (1990) Impure altruism and donations to public goods: a theory of warm-glow giving. Econ J 100(401):464–477

Bartling B, Fehr E, Herz H (2014) The intrinsic value of decision rights. Econometrica 82(6):2005–2039

Benito-Ostolaza JM, Hernandez P, Sanchis- Llopis JA (2016) Do individuals with higher cognitive ability play more strategically? J Behav Exp Econ 64:5–11

Bowles S, Gintis H (2002) Social capital and community governance. Econ J 112(483):419–436

Brañas Garza P, García-Muñoz T, Hernán González R (2012) Cognitive effort in the beauty contest game. J Econ Behav Organ 83:254–260

Brockner J, Guzzi B, Kane J, ans Levine E, Shaplen K (1984) Organizational fundrasing: further evidence on the effect of legitimizing small donations. J Consum Res 11:611–614

Cadsbya C, Maynesb E (1999) Voluntary provision of threshold public goods with continuous contributions: experimental evidence. J Public Econ 71:53–73

Carpenter JP, Daniere AG, Takahashi LM (2004) Cooperation, trust, and social capital in southeast asian urban slums. J Econ Behav Organ 55(4):533–551

Carpenter P, Just M, Shell P (1990) What one intelligence test measures: a theoretical account of the processing in the raven progressive matrices test. Psychol Rev 97(3):404–431

Cialdini R, Schroeder D (1976) Increasing compliance by legitimizing paltry contributions: when even a penny helps. J Pers Soc Psychol 34(4):599–604

Croson R, Shang J (2008) The impact of downward social information on contribution decisions. Exp Econ 11:221–233

Desmet P (1999) Asking for less to obtain more. J Interact Market 13(3):55–65

Doob A, McLaughlin D (1989) Ask and you shall be given: request size and donations to a good cause. J Appl Soc Psychol 19(12):1049–1056

Fehr E, Gachter S (2000) Cooperation and punishment in public goods experiments. Am Econ Rev 90(4):980–994

Fischbacher U (2007) z-tree: Zurich toolbox for ready-made economic experiments. Exp Econ 10:171–178

Fischbacher U, Gächter S, Fehr E (2001) Are people conditionally cooperative? Evidence from a public goods experiment. Econ Lett 71(3):397–404

Freedman J, Fraser S (1966) Compliance without pressure: the foot-in-the-door technique. J Pers Soc Psychol 4:95–202

Frey B, Meier S (2004) Social comparisons and pro-social behavior: testing “conditional cooperation” in a field experiment. Am Econ Rev 94(5):1717–1722

Gangadharan L, Nikiforakis N (2009) Does the size of the action set matter for cooperation? Econ Lett 104:115–117

Gill D, Prowse V (2016) Cognitive ability, character skills, and learning to play equilibrium: a leve-k-analysis. J Polit Econ 124(6):1619–1676

Gravel N (1994) Can a ranking of opportunity sets attach an intrinsic importance to freedom of choice? Am Econ Rev 84(2):454–458

Gray J, Thompson P (2004) Neurobiology of intelligence: science and ethics. Nat Rev Neurosci 5(6):471–482

Grootaert C (2003) Social capital: the missing link. In: Dekker P, Uslaner EM (eds) Social capital and participation in everyday life, chapter 8. Roudledge, London

Huang P (2020) Trump and who: How much does the U.S. give? What’s the impact of a halt in funding? NPR, retrieved from https://www.npr.org/sections/goatsandsoda/2020/04/15/834666123/trump-and-who-how-much-does-the-u-sgive-whats-the-impact-of-a-halt-in-funding

Knack S, Keefer P (1997) Does social capital have an economic payoff? A cross-country investigation. Q J Econ 112(4):1251–1288

Lange A, List JA, Price MK (2007) Using lotteries to finance public goods: theory and experimental evidence. Int Econ Rev 48(3):901–927

Leonard T, Croson R, de Oliveira A (2010) Social capital and public goods. J Soc Econ 30:474–481

Martin R, Randal J (2008) How is donation behaviour affected by the donations of others? J Econ Behav Organ 67(1):228–238

Meinzen-Dick R (1997) Farmer participation in irrigation, a 20 years of experience and lessons for the future. Irrigat Drain Syst 11(2):103–118

Name-Correa A, Yildirim H (2016) Giving in to social pressure. Games Econo Behav 99:99–116

Ostrom E (1995) Incentives, rules of the game, and development. In: Bruno M, Pleskovicr B (eds) Annual bank conference on development economicsk. World Bank, Washington

Pattanaik PK, Xu Y (1990) On ranking opportunity sets in terms of freedom of choice. Louvain Econ Rev 56(3–4):383–390

Putnam R (1993) Making democracy work: civic traditions in modern Italy. Princeton University Press, Princeton

Putnam R (2000) Bowling alone: the collapse and revival of American community. Simon and Schuster, New York

Raven J (1936) Mental tests used in generic studies: the performance of related individuals on tests mainly educative and mainly reproductive (M.Sc. thesis). London: University of London

Reiley D, Samek, A (2015) How do suggested donations affect charitable gifts? Evidence from a fields experiment in public broadcasting. In: SPI working paper series, Universty of Chicago, vol 142-SPI

Schniter E, Sheremeta R, Shields T (2015) The problem with all-or-nothing trust games: what others choose not to do matters in trust-based exchange. In: MPRA Paper, no. 68561

Sen A (1988) Freedom of choice: concept and content. Eur Econ Rev 32(2–3):269–294

Shang J, Croson R (2009) A field experiment in charitable contribution: the impact of social information on the voluntary provision of public goods. Econ J 119:1422–1439

Shearman S, Yoo J (2007) “Even a penny will help”: legitimization of paltry donation and social proof in soliciting donation to a charitable organization. Commun Res Rep 24(4):271–282

Sobel J (2002) Can we trust social capital? J Econ Lit 40(1):139–154

Weyant J, Smith S (1987) Getting more by asking for less: the effects of request size on donations of charity. J Appl Soc Psychol 17(4):392–400

Wollebaek D, Selle P (2003) Participation and social capital formation: Norway in a comparative perspective 1. Scand Polit Stud 26(1):67–91

Zhang Y, Fu F, Wu T, Xie GLW (2013) A tale of two contribution mechanisms for nonlinear public goods. Sci Rep 3(2021):1–5

Title: Participation in and provision of public goods: Does granularity matter?
Authors: Ricardo Arlegi
Juan M. Benito-Ostolaza
Nuria Osés-Eraso
Publication date: 17-07-2020
Publisher: Springer Berlin Heidelberg
Published in: Journal of Economic Interaction and Coordination / Issue 2/2021
Print ISSN: 1860-711X
Electronic ISSN: 1860-7128
DOI: https://doi.org/10.1007/s11403-020-00293-3

Springer Professional

Abstract

Please log in to get access to your license.

Dont have a licence yet? Then find out more about our products and how to get one now:

Springer Professional "Wirtschaft+Technik"

Springer Professional "Wirtschaft"

Other articles of this Issue 2/2021

Measuring income inequality based on unequally distributed income

Hand-to-mouth consumers, rule-of-thumb savers, and optimal control

Studying the correlation structure based on market geometry

The nonlinear distribution of employment across municipalities

Of pride and prejudice: agent learning under sticky and persistent stereotype

3% rules the market: herding behavior of a group of investors, asset market volatility, and return to the group in an agent-based model