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Abstract:
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"Public goods are goods which are nonexcludable (no one can exclude another's consumption) and nonrival (one person's use does not diminish another individual's consumption). Theory suggests that because agents do not consider the positive benefits realized by others when they make their decisions, they will provide less than the optimal amount of the public good. According to theorists, agents will 'free-ride' on the generosity of others without returning the favour.
"In public goods experiments subjects quite regularly provide a level of public good that exceeds the theoretically derived self-interested level. This result has been repeated many times under a variety of experiment treatments. This has led to the hypothesis that people might gain some utility from the act of contributing to the group good; that is, they may obtain utility from being generous.
"This paper presents the results of a series of laboratory sessions which distinguish between the effects of generous behavior and attempts at cooperative behavior of a group of subjects participating in a voluntary contributions public goods setting. If generosity has value, then generous subjects should be willing to incur a cost to be generous. Cooperators, on the other hand, do not give for the benefit of others but instead understand the benefits of mutual cooperation as being in their own self-interest. Results suggest that subject behaviour may better be characterized as attempted cooperation rather than generosity."
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