Cost Sharing for Public Goods: Exploring Alternative Institutions for Coordination under Heterogeneity
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Date
2002
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Abstract
"Four institutions for group decision about cost-sharing for a public good are compared here experimentally. Three of the institutions are based on price-taking behavior. The fourth mechanism is similar to a Voluntary Contribution Mechanism in its use of bids. Three of the four use some form of bid messages. Design of each institution is based on an underlying coordination algorithm. The common experimental game framework includes unanimity voting to select the group outcome and provide an incentive against free-riding. The experimental environment exhibits heterogeneity in endowments and rewards. Testing confirmed that the nature of institutional rules affect individual behavior and group decision."
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Keywords
game theory, institutions, heterogeneity, rules, decision making--theory, public goods and bads--theory, behavior--theory