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Information Networks and Their Role in Threshold Public Goods Games: An Experimental Study

Author

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  • Kreitmair, Ursula W.
  • Banerjee, Simanti
  • Walker, James M.
Abstract
In this study, we employ laboratory economic experiments to explore the role information networks play in the collective provision of threshold or provision point public goods. Threshold public goods are those for which a target or threshold level of funds must be raised to make provision possible or economically viable. Many public goods exhibit this characteristic as they may only be provided in discrete quantities. Thresholds or provision points are particularly relevant to environmental public goods, given non-linear ecological processes. In a broader context, the study of contribution behavior for threshold public goods also provides valuable insights into fundraising activities of both national and local profit and not-for-profit agencies, which typically involve provision points. On the basis of a 2x2 full factorial treatment design we test the following hypotheses: 1) Given LOW endowments, localized information will be less effective than full contribution information in meeting the provision point. 2) Given HIGH endowments local information will be as effective as full information to meet the threshold contribution level. 3) In cases where the threshold is met, group members are more likely to make identical contributions in the COMPLETE treatments than in the LOCAL treatments.

Suggested Citation

  • Kreitmair, Ursula W. & Banerjee, Simanti & Walker, James M., 2015. "Information Networks and Their Role in Threshold Public Goods Games: An Experimental Study," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 206562, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea15:206562
    DOI: 10.22004/ag.econ.206562
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    Keywords

    Environmental Economics and Policy; Institutional and Behavioral Economics; Public Economics;
    All these keywords.

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