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Heterogeneity, Coordination and the Provision of Best-Shot Public Goods

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  • Todd Cherry
  • Stephen Cotten
  • Stephan Kroll
Abstract
In a best-shot public good, where the provision level is determined by the highest contribution instead of the sum of all contributions, there is potential for waste and underprovision due to coordination failure. These failures are exacerbated when agents are identical because there is no focal point to guide coordination. In most real-world best-shot public-good situations, however, heterogeneity exists in the ability to contribute and the benefits received from the good. With such differences, shared expectations might emerge to improve coordination and increase efficiency. Using laboratory experiments, we find significant behavioral responses to heterogeneity that improve efficiency, but not always from increased coordination. Copyright Economic Science Association 2013

Suggested Citation

  • Todd Cherry & Stephen Cotten & Stephan Kroll, 2013. "Heterogeneity, Coordination and the Provision of Best-Shot Public Goods," Experimental Economics, Springer;Economic Science Association, vol. 16(4), pages 497-510, December.
    • Handle: RePEc:kap:expeco:v:16:y:2013:i:4:p:497-510
    DOI: 10.1007/s10683-012-9349-1
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    References listed on IDEAS

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    1. Vincent P. Crawford & Uri Gneezy & Yuval Rottenstreich, 2008. "The Power of Focal Points Is Limited: Even Minute Payoff Asymmetry May Yield Large Coordination Failures," American Economic Review, American Economic Association, vol. 98(4), pages 1443-1458, September.
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    6. Straub, Paul G., 1995. "Risk dominance and coordination failures in static games," The Quarterly Review of Economics and Finance, Elsevier, vol. 35(4), pages 339-363.
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    Cited by:

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    2. Karakostas, Alexandros & Kocher, Martin G. & Matzat, Dominik & Rau, Holger A. & Riewe, Gerhard, 2023. "The team allocator game: Allocation power in public goods games," Games and Economic Behavior, Elsevier, vol. 140(C), pages 73-87.
    3. Paton Pak Chun Yam & Gary Ting Tat Ng & Wing Tung Au & Lin Tao & Su Lu & Hildie Leung & Jane M Y Fung, 2018. "The effect of subgroup homogeneity of efficacy on contribution in public good dilemmas," PLOS ONE, Public Library of Science, vol. 13(7), pages 1-18, July.
    4. Lisa Bruttel & Werner Güth, 2018. "Asymmetric voluntary cooperation: a repeated sequential best-shot experiment," International Journal of Game Theory, Springer;Game Theory Society, vol. 47(3), pages 873-891, September.
    5. Maas, Alexander & Goemans, Christopher & Manning, Dale & Kroll, Stephan & Brown, Thomas, 2017. "Dilemmas, coordination and defection: How uncertain tipping points induce common pool resource destruction," Games and Economic Behavior, Elsevier, vol. 104(C), pages 760-774.

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    More about this item

    Keywords

    Best-shot public goods; Coordination problem; Endowment heterogeneity; Return heterogeneity; Experiment; C72; C92; D01; H41;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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