Voting on Thresholds for Public Goods: Experimental Evidence
Publikation: Working paper › Forskning
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Voting on Thresholds for Public Goods : Experimental Evidence. / Rauchdobler, Julian; Sausgruber, Rupert; Tyran, Jean-Robert.
Department of Economics, University of Copenhagen, 2009.Publikation: Working paper › Forskning
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TY - UNPB
T1 - Voting on Thresholds for Public Goods
T2 - Experimental Evidence
AU - Rauchdobler, Julian
AU - Sausgruber, Rupert
AU - Tyran, Jean-Robert
N1 - JEL classification: H41, D72, C92
PY - 2009
Y1 - 2009
N2 - Introducing a threshold in the sense of a minimal project size transforms a public goods game with an inefficient equilibrium into a coordination game with a set of Pareto-superior equilibria. Thresholds may therefore improve efficiency in the voluntary provision of public goods. In our one-shot experiment, we find that coordination often fails and exogenously imposed thresholds are ineffective at best and often counter-productive. This holds under a range of threshold levels and refund rates. We test if thresholds perform better if they are endogenously chosen, i.e. if a threshold is approved in a referendum, because voting may facilitate coordination due to signaling and commitment effects. We find that voting does have signaling and commitment effects but they are not strong enough to significantly improve the efficiency of thresholds.
AB - Introducing a threshold in the sense of a minimal project size transforms a public goods game with an inefficient equilibrium into a coordination game with a set of Pareto-superior equilibria. Thresholds may therefore improve efficiency in the voluntary provision of public goods. In our one-shot experiment, we find that coordination often fails and exogenously imposed thresholds are ineffective at best and often counter-productive. This holds under a range of threshold levels and refund rates. We test if thresholds perform better if they are endogenously chosen, i.e. if a threshold is approved in a referendum, because voting may facilitate coordination due to signaling and commitment effects. We find that voting does have signaling and commitment effects but they are not strong enough to significantly improve the efficiency of thresholds.
KW - Faculty of Social Sciences
KW - provision of public goods
KW - threshold
KW - experiment
M3 - Working paper
BT - Voting on Thresholds for Public Goods
PB - Department of Economics, University of Copenhagen
ER -
ID: 17083792