nach oben

Journal of Economic Interaction and Coordination

Erschienen in:

09.02.2016 | Regular Article

Voting for the distribution rule in a Public Good Game with heterogeneous endowments

verfasst von: Annarita Colasante, Alberto Russo

Erschienen in: Journal of Economic Interaction and Coordination | Ausgabe 3/2017

Einloggen

Aktivieren Sie unsere intelligente Suche, um passende Fachinhalte oder Patente zu finden.

search-config

KI-gestützte Suche

Aus

Abstract

This paper analyzes the impact of inequality in the distribution of endowments on cooperation. We conduct a lab experiment using a dynamic Public Good Game to test this relation. We introduce the possibility of choosing among three different redistribution rules: Equidistribution, Proportional to contribution and Progressive to endowment. This novelty in a dynamic environment allows us to analyze how the inequality within groups changes according to individual choices and to investigate if players show inequity averse preferences. Results show that inequality has a negative impact on individual contribution. Players act in order to reduce the initial exogenous inequality. Indeed, in the Treatment with the highest level of inequality, agents vote for reducing the endowment heterogeneity. Moreover, individual contribution is strongly influenced by others’ contributions.

Nächster Artikel Complexity and model comparison in agent based modeling of financial markets

Sie haben noch keine Lizenz? Dann Informieren Sie sich jetzt über unsere Produkte:

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!

Jetzt informieren

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!

Jetzt informieren

Nur mit Berechtigung zugänglich

As in Fehr and Gatcher (2000), reciprocity is a conditional form of kindness, that is kind behavior is conditioned by other kind behavior.

We recommend and control that the communication is useful only for the scope of the game. Indeed, group message flow was monitored to ensure that they did not reveal their identity to others.

We sent an invitation email to 120 students but only 105 finally partcipated. This is a standard procedure in experiments in which a prefixed number of participant is needed. It is necessary to invite more people than the effective number in order to avoid the problem of no-show players.

It is important to underline that in our experiment the maximum earning per person is 25 Euro. As in Croson (2005), we consider as reference point the hourly wage of a on-campus job which is equal to 10 Euro.

We also run a parametric test (t test) even if we have few observations. The results of the parametric test also reject the null hypothesis since for both Treatment 2 and Treatment 3 we have \(p\,\mathrm{value} <\)0.01.

In the 90 % of cases the decision is taken unanimously.

The payoff function depends both on the exogenous endowment and on the share of contribution in the previous period. This implies that the regressors are not exogenous. In other words, in our setting it should be the case that \(E(x_{it}\epsilon _{it})\ne 0\). To verify this hypothesis we should consider an estimation with Instrumental variables. We are not able to run this regression because we have no exogenous variables to use as instruments.

The distinction between rich and poor players are done according to the initial endowment. Type 1 and Type 2 are the rich players. Despite the strong reduction of the degree of inequality, the average endowment of Type 1 and Type 2 are always grater than the endowment of others.

In fact, even efficiency motivations such as the sustain of both the aggregate demand in the short-to-medium run and the economic growth in the long run would motivate radical interventions, that is more progressivity in the taxation system and also large tax rate on inheritance Atkinson (2015).

Anderson LR, Mellor JM, Milyo J (2008) Inequality and public good provision: an experimental analysis. J Socio Econ 37:1010–1028CrossRef

Atkinson AB (2015) Inequality: what can be done? Harvard University Press, Cambridge

Balafoutas L, Kocher MG, Putterman L, Sutter M (2013) Equality, equity and incentives: an experiment. Eur Econ Rev 60:32–51CrossRef

Bicchieri C, Lev-On A (2007) Computer-mediated communication and cooperation in social dilemmas: an experimental analysis. Polit Philos Econ 6(2):139–168CrossRef

Buckley E, Croson R (2006) Income and wealth heterogeneity in the voluntary provision of linear public good game. J Public Econ 90:935–955CrossRef

Burns J, Visser M (2008) Income inequality and the provision of public goods: when the real world mimic the lab. Working Paper

Cardenas JC (2003) Real wealth and experimental cooperation: experiments in the field lab. J Dev Econ 70:263–289CrossRef

Chan KS, Mestelman S, Moir R, Muller RA (1999) Heterogeneity and the voluntary provision of public goods. Exp Econ 2(2):5–30

Cherry TL, Kroll S, Shogren JF (2005) The impact of endowment heterogeneity and origin on public good contributions: evidence from the lab. J Econ Behav Org 57:357–365CrossRef

Cooper R, DeJong DV, Forsythe R, Ross TW (1996) Cooperation without reputation: experimental evidence from prisoner’s dilemma games. Games Econ Behav 12(2):187–218CrossRef

Croson R (2005) The method of experimental economics. Int Negot 10(1):131–148CrossRef

Fehr E, Gatcher S (2000) Fairness and retaliation: the economics of reciprocity. J Econ Perspect 14(3):159–181CrossRef

Fehr E, Shmidt KM (1999) A theory of fairness, competition and cooperation. Q J Econ 114:817–868CrossRef

Fischbacher U (2007) z-tree: Zurich toolbox for ready-made economic experiments. Exp Econ 10(2):171–178CrossRef

Fischbacher U, Gachter S, Fehr E (2001) Are people conditional cooperative? evidence from a public godds experiment. Econ Lett 71:397–404CrossRef

Fisher J, Isaac RM, Schatzberg JW, Walker JM (1995) Heterogeneous demand for public good: behavior in the voluntary contribution mechanism. Public Choice 85:249–266CrossRef

Gaechter S, Mengel F, Tsakas E, Vostroknutov A (2014) Growth and inequality in public good games. Available at SSRN 2351717. doi:10.2139/ssrn.2351717

Georgantzís N, Proestakis A (2011) Accounting for real wealth in heterogeneous-endowment public good games. The papers 10

Hofmeyr A, Burns J, Visser M (2007) Income inequality, reciprocity and public good provision: an experimental analysis. S Afr J Econ 75(3):508–520

Isaac MR, Walker JR, Thomas SH (1984) Divergent evidence on free riding: an experimental examination of possible explanation. Public Choice 43:113–149

Levati MV, Morone A (2013) Voluntary contributions with risky and uncertain marginal returns: the importance of the parameter values. J Public Econ Theory 15(5):736–744CrossRef

Levati MV, Morone A, Fiore A (2009) Voluntary contributions with imperfect information: an experimental study. Public Choice 138:199–216CrossRef

Marwell G, Ames RE (1981) Economists free ride, does anyone else? J Public Econ 15:295–310CrossRef

Marx LM, Matthews SA (2000) Dynamic voluntary contribution to a public project. Rev Econ Stud 67(2):327–358CrossRef

Niehues J (2014) Subjective perceptions of inequality and redistributive preferences: an international comparison. IW-TRENDS discussion papers 2

Oprea R, Charness G, Friedman D (2014) Continuous time and communication in a public-goods experiment. J Econ Behav Org 108:212–223CrossRef

Ostrom E, Walker J, Gardner R (1992) Covenants with and without a sword: self-governance is possible. Am Polit Sci Rev 86(02):404–417CrossRef

Saez E, Zucman G (2014) Wealth inequality in the united states since 1913: evidence from capitalized income tax data. Technical Report No w20625, National Bureau of Economic Research

Zhang J, Casari M (2012) How groups reach agreement in risky choices: an experiment. Econ Inq 50(2):502–515CrossRef

Titel: Voting for the distribution rule in a Public Good Game with heterogeneous endowments
verfasst von: Annarita Colasante
Alberto Russo
Publikationsdatum: 09.02.2016
Verlag: Springer Berlin Heidelberg
Erschienen in: Journal of Economic Interaction and Coordination / Ausgabe 3/2017
Print ISSN: 1860-711X
Elektronische ISSN: 1860-7128
DOI: https://doi.org/10.1007/s11403-016-0172-1

Springer Professional

Abstract

Bitte loggen Sie sich ein, um Zugang zu Ihrer Lizenz zu erhalten.

Sie haben noch keine Lizenz? Dann Informieren Sie sich jetzt über unsere Produkte:

Springer Professional "Wirtschaft+Technik"

Springer Professional "Wirtschaft"

Weitere Artikel der Ausgabe 3/2017

On the coevolution of social norms in primitive societies

Monetary policy and dark corners in a stylized agent-based model

Complexity and model comparison in agent based modeling of financial markets

Heterogeneity of expectations and financial crises: a stochastic dynamic approach

The effect of communication channels on promise-making and promise-keeping: experimental evidence

Multiscale correlation networks analysis of the US stock market: a wavelet analysis