Discussion Paper

No. 2009-5 | January 06, 2009
One Step at a Time: Do Threshold Patterns Matter in Public Good Provision?

Abstract

There is a substantial literature examining coordination in public goods games. We conducted an experiment to explore how varying patterns of thresholds affect the willingness of subjects to contribute to a public good. We had subjects play a multiperiod game where each subject was allocated an initial point endowment, told a threshold for the group and had to choose how much to contribute to the common pot. Each period is identical, except for the possibility of having a different threshold, which is always stated before the players make their contributions. We found that while contributions are similar for the increasing and decreasing threshold group types when thresholds were low, a sizeable gap opens up around the average threshold size. We found that for nearly every threshold, it is more profitable to be in an increasing than in a decreasing threshold group type. Early cooperation seems to facilitate the achievement of harder-to-reach thresholds, which require considerable contributions from all members of the group. These findings are also very robust in the regression specifications. Our findings shed light on the role of past cooperative success and threshold patterns on subsequent willingness to cooperate.

JEL Classification

C91 C92 D81 G14 H41

Cite As

Sam Asher, Lorenzo Casaburi, Plamen Nikolov, and Maoliang Ye (2009). One Step at a Time: Do Threshold Patterns Matter in Public Good Provision?. Economics Discussion Papers, No 2009-5, Kiel Institute for the World Economy. http://www.economics-ejournal.org/economics/discussionpapers/2009-5

Assessment



Comments and Questions


Anonymous - Referee Report 1
February 03, 2009 - 09:23

See attached file


Anonymous - Referee Report 2
March 06, 2009 - 09:37

See attached file